After a summer slowdown, US employers hired more workers than they expected in October.
Official figures revealed that 531,000 new jobs were created by firms and that the unemployment rate dropped to 4.6%.
The September hiring numbers were also adjusted upwards.
Due to the rapid spread of Delta and slow growth, hiring was slowed over the summer. Additionally, some workers were reluctant to go back to work.
Employers are scrambling to find staff, and many of them have had difficulty meeting growing demand. To attract and keep staff, many employers are increasing wages. The Bureau for Labor Statistics reported that the October average wage for the private sector was $30.96/hour. This is a modest increase, however, it adds six months of significant wage rises.
Over the past year, average earnings grew by 4.9% faster than annual inflation which stands at 4.4%.
The September revised data showed that 312,000 more jobs were created than initially estimated at 197,000.
The August figures were revised from 366,000 to 483,000.
The Bureau reported that there was a notable increase in leisure and tourism, as well as in business and professional services. There also were gains in manufacturing and transport and warehousing.
All data combined show a strong upward trend. However, jobs growth remains below that seen in the first six months of this year.
by Michelle Fleury, BBC business correspondent
Biden used October’s jobs report as a win lap to highlight that the recovery has been stronger and faster than expected.
He stated that unemployment was lower this year than it has been since 1950.
This solid job report shows that after months of disappointing data, economic downturn from the Delta wave may finally be over.
This was more evident than anywhere else, including in the leisure- and hospitality industry which created 164,000 new jobs.
The gains were not limited to one sector. The private sector saw strong hiring, both in business and professional services and manufacturing.
There is still much to be done.
There are more jobs in this country now than there were before the pandemic.
The labour force participation rate, which is the percentage of those who are looking for jobs and have a job, remains flat despite the economy’s recovery.
It seems that many of those who fled the American labor market in the wake of the pandemic are not eager to return. They are unlikely to return.
The US economy has been showing some signs of recovery, according to today’s report. However, it is impossible to know if the performance will continue given the lingering supply-chain issues and unpredictable effects of the healthcare crisis.
Analysts noted that the report was a positive indicator of recovery after the pandemic.
Peter Cardillo (chief market economist, Spartan Capital Securities) said: “It indicates that we are seeing the jobs markets healing to the extent where we could expect even greater gains next month as people return to work force.”
The participation rate shows how many people have jobs and are searching for them. It remains flat. This suggests that not everyone wants to go back to the old ways.
Joe Manimbo (senior market analyst, Western Union Business Solutions) in Washington stated that “the participation rate idled was at 61.6%”
“The market would like to see people get back on the job force and not be left behind,”
People have been kept out of the labor market by fears of Covid infection and childcare difficulties, as well as relocations or other lifestyle changes.
Government support is ending, so children can go back to school. With the economy recovering from the pandemic, economists anticipate that more people will return to work.
At the moment, 7.4 Million people are out of work. This is a sharp drop from the peak in the pandemic. However, it’s still higher than the 5.7million who looked for work before Covid.
The unemployment rate for February 2020 before the pandemic was over, which was 3.5%
Principal Global Investors chief strategist Seema Shaikh said it was somewhat confusing why people weren’t returning to their jobs more often.
“At the moment, with reduced benefit, a return-to-in-person schooling, and the drop of Covid rates we should be seeing an increase in participation,” she stated.
Are you wondering if the enormous savings are still holding back the motivation to return to work? Is there an underlying shift in working psychology?
She added that supply chain problems will only persist if more workers are not returning to work.
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