The U.S. economy roared back in Oct. with 531,000 new jobs, surpassing most analysts’ expectations.
The unemployment rate nosed down two points to 4.6%, the Labor Department reported on Friday morning. That’s the lowest unemployment rate since March 2020, when the COVID-19 pandemic shuttered businesses and disrupted the global economy.
However, Oct.’s 4.6% unemployment rate remains significantly higher than in Feb. 2020. That month, the country’s unemployment stood at 3.5%.
Non-government jobs grew even more than the headline number of 531,000. Private payrolls added 604,000 jobs last month, but fewer government jobs detracted from total job growth.
Inflation continues to plague the U.S. economy, as evidenced by remarkable wage growth.
“In Oct., average hourly earnings for all employees on private nonfarm payrolls increased by 11 cents to $30.96, following large increases in the prior 6 months,” the Labor Department said.
Average wages have gone up 4.9% since Oct. 2020.
Where the jobs are
According to the Labor Department, many sectors of the economy experienced job growth last month.
The most significant gains came in manufacturing, transportation and warehousing, leisure and hospitality, and business services.
Of these industries, leisure and hospitality added the most jobs, growing by 164,000. The result aligns with Bureau of Economic Analysis data that shows a growing number of people spending money on accommodations and at bars and restaurants.
Leisure and hospitality employers have added 2.4 million jobs so far this year. Still, the industry’s down 1.4 million jobs since Feb. 2020.
Business services added 100,000 jobs, followed by manufacturing (60,000) and transportation and warehousing (54,000).
Job growth in transportation and warehousing comes as the nation struggles with supply chain issues. That industry has 149,000 more jobs now than it did in Feb. 2020.
Economy shows positive signs, causes for concern remain
The U.S. economy has been slow to recover from the pandemic-triggered recession, but today’s report provides reasons for optimism.
Along with Oct’s impressive job growth, the Labor Department revised upward its estimate for jobs created in Aug. and Sep.
For Aug., the department now says the country added 483,000 jobs. And the department now says the economy grew by 312,000 jobs in Sep.
“With these revisions, employment in August and September combined is 235,000 higher than previously reported,” the Labor Department said.
On Wed., the Federal Reserve announced it would start easing its monthly bond purchases, which it’s been doing to fuel the economy.
The central bank’s Federal Open Market Committee said it will begin reducing those purchases later this month, “in light of the substantial further progress the economy has made.”
Despite these positive signs, there remain causes for concern about the U.S. economy.
The country’s inflation rate has exploded throughout the year, hovering around 5.4% for many months.
Plus, the number of people active in the workforce remains below pre-pandemic levels. The country recorded a labor participation rate of 61.4% in Oct., 1.7 percentage points below its Feb. 2020 recording.
And while the number of long-term unemployed people dropped in Oct. to 2.3 million, that’s still 1.2 million more than in Feb. 2020. These are individuals who’ve been unemployed for six months or longer.
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