Following a summer slowdown, United States employers hired more new workers in October than expected as wages edge higher
Authorized figures show that firms added 531,000 jobs and the unemployment rate fell slightly to 4.6 percent.
The September hiring figures were also revised upward.
The spread of the Delta variant and slower growth had slowed hiring over the summer, as had an apparent reluctance on the part of some workers to return to work.
As a result, many employers are scrambling for workers and struggling to meet rising demand. Many companies are raising wages in order to attract and retain employees. According to Bureau of Labor Statistics data, average private-sector wages increased by 11 cents in October to $30.96 per hour, adding to a six-month streak of strong wage increases.
Average earnings have increased by 4.9 percent in the last year, outpacing annual inflation, which is currently running at 4.4 percent.
According to revised September data, 312,000 more jobs were created that month than the 197,000 initially reported.
August figures were also revised higher, from 366,000 to 483,000.
According to the Bureau, there were significant gains in leisure and hospitality, professional and business services, manufacturing, and transportation and warehousing.
Taken as a whole, the data show a strong upward trend, though job growth remains lower than in the first half of the year.
President Biden took a victory lap after the October jobs report, claiming that the recovery had been faster and stronger than expected.
He claimed that unemployment had dropped more this year than in any other year since 1950.
After several months of disappointing data, the solid jobs report indicates that the economic fallout from the Delta wave is finally subsiding.
That was most evident in the leisure and hospitality sector, which added 164,000 jobs.
And the benefits were not limited to a single industry. Hiring in the private sector was strong across the board, including in professional and business services and manufacturing.
However, there is still a large hole to be dug out of.
The country has lost over four million jobs since the pandemic began.
And, even as the economy recovers, the labor force participation rate, which measures the proportion of people who have jobs or are actively looking for work, remains flat.
A large number of workers who left the American labor force during the pandemic do not appear to be eager to return. And it’s unclear whether they will.
According to today’s report, the US economy is gaining traction. But, with lingering supply chain issues and the unpredictability of the health crisis, it’s unclear whether this performance can be repeated.
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Analysts hailed the report as an encouraging sign of post-pandemic recovery.
However, the participation rate, which indicates how many potential workers are employed or looking for work, has remained flat, implying that not everyone is ready for a return to normalcy.
The market wants to see people return to the labor force from the sidelines.”
Some people have stayed out of the labor force due to concerns about Covid infection, childcare issues, relocations, and other lifestyle changes.
With government assistance ending, children returning to school, and pandemic savings depleted, economists expect more people to return to work.
There are currently 7.4 million people out of work, a significant decrease from the peak during the pandemic but a significant increase from the 5.7 million who were looking for work prior to Covid.
Before the pandemic, the unemployment rate was 3.5 percent in February 2020.
Seema Shah, the chief strategist at Principal Global Investors, stated that it was “a little perplexing” why more people were not returning to work.
“At this point, with reduced benefits, a return to in-person education, and a drop in Covid rates, we should see a recovery in participation,” she said.
“Is it because the massive savings cushion continues to weigh on the incentive to return to work? Is there a fundamental shift in working psychology?”
“Supply chain issues will only persist” until more workers return, she added.
