Employers add 531,000 jobs as recovery gains steam, unemployment rate falls to 4.6%

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The latest report from the Labor Department comes after months of slow hiring.

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US employers added 531,000 jobs in October and the unemployment rate fell by a fraction of a percentage point to 4.6%, the Labor Department said Friday.

Job growth was widespread and beat economists’ expectations. The leisure and hospitality, professional and business services, manufacturing, and transportation and warehousing sectors saw major gains, following months of disappointing work data indicating a post-pandemic rebound in the labor market. Employers added some 312,000 jobs in September, according to revised DOL data released Friday.

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“Overall, this was a really positive jobs report, but leaves some questions about the structure of the labor market for the Fed,” Megan Green, global chief economist at advisory firm Kroll Institute and a senior fellow at Harvard Kennedy School, told ABC. Is.” The news came soon after the report was released on Friday.

Green noted that a lot of high-wage, high-hours jobs were added in construction and construction, as well as a lot of jobs in the service industry — the hardest hit by the crisis and the slowest rebound.

“I think that just shows that the delta version has waned and caretakers are probably feeling more confident that schools are indeed open and will remain open so they can go back to work,” Green said. “So, I think it’s all good news.”

“America is getting back to work,” said President Joe Biden. “Our economy is starting to work for more Americans, thanks to the economic plan we laid out in Congress earlier this year, and successful vaccine deployment.”

“Our economy is moving forward,” Biden said, with the job indicating “we are on the right track.”

Still, the president noted that the positive numbers did not outweigh the need for more spending, taking time on Friday during his remarks to tout his Build Back Better plan.

The labor force participation rate was unchanged at 61.6% in October, the DOL said, and remains within a narrow range of 61.4% to 61.7% from June 2020.

Green said it simply meant that “more people got jobs — we didn’t bring in anyone from the edge of the labor market, which is what the Fed wants to see happen.”

“I think there are questions about whether the labor force participation rate is really going up, or whether we’re just facing a structurally different labor market” after the pandemic, Green said.

Employment has increased by 18.2 million since the most recent low seen in April 2020, when the pandemic broke out, but down some 4.2 million, or 2.8%, from pre-pandemic levels. The unemployment rate was a historic low of 3.5% in February 2020.

Some 164,000 jobs were added in the leisure and hospitality sector last month, according to Friday’s data, but employment in this sector is still down 8.2% compared to February 2020.

The DOL said other notable job gains occurred in professional and vocational services, which added 100,000 jobs in October, including a gain of 41,000 in temporary support services. Manufacturing added 60,000 jobs last month, and the transportation and warehousing sectors saw an increase in employment to 54,000.

In addition, median hourly earnings for all employees rose 11 cents to $30.96 last month. The shortage of workers accepting low-wage jobs in the wake of the pandemic has been linked to rising wages seen in recent months, as many major companies struggled to lay off employees in the early days of the pandemic.

“I think in order to attract workers, some companies are going to have to offer more funding,” Green said. “The average hourly wage rose, but they rose slightly less rapidly than prices, meaning it is eating into people’s living standards, so it’s generally a concern.”

“But there’s also a concern that if you get a salary increase, companies will go ahead and pass that cost on to the end user, the consumer, and then you get higher prices and then employees will say we need more income in order.” To be able to afford things, and so you’ll get a higher wage increase and you end up in this pay-price spiral,” he added.

It’s too early to tell whether this is a singular event or part of a larger trend, with Green cautioning that raising wages isn’t a problem if it doesn’t turn into a spiral and productivity is rising, which is a “Goldilocks scenario.” , where higher productivity growth is resulting in an increase in the standard of living of the people.”

There are still inequalities hidden in the recovery. Last month the unemployment rate for black workers was nearly twice that of white workers – 7.9% compared to 4%. The unemployment rate in October was 5.9% for Hispanic workers and 4.2% for Asian workers.

“There’s no doubt that there has been a lot of inequality during this pandemic,” Green said, “and I think it’s reflected in some of the racial, ethnic data in the jobs report.”

That’s important for the Fed and policymakers to keep in mind, he said, because they aim for inclusive, full employment.

Finally, DOL data indicates that some companies are recalling employees to the office following the vaccine rollout. The DoL said last month about 11.6% of employed persons teleworked because of the pandemic, up from 13.2% in September.

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