US job growth gets back on track in October; unemployment rate falls to 4.6%
PremiumThe faster pace of hiring shows that more Americans returned to workplaces as Covid-19 cases declined and employers offered higher wages
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The U.S. labor market got back on track last month with a larger-than-forecast and broad-based payrolls gain, indicating greater progress filling millions of vacancies as the effects of the delta variant faded.
Nonfarm payrolls increased 531,000 last month after large upward revisions to the prior two months, a Labor Department report showed Friday. The unemployment rate fell to 4.6% while the labor force participation rate was unchanged.
The median estimate in a Bloomberg survey of economists called for a 450,000 payrolls gain and for the jobless rate to fall to 4.7%. The dollar held on to gains after the data, while the yield on the 10-year Treasury note fluctuated. U.S. stock-index futures rose.
Follow the reaction in real-time here on Bloomberg’s TOPLive blog
The faster pace of hiring shows that more Americans returned to workplaces as Covid-19 cases declined and employers offered higher wages. Some of the payroll growth may have also come after an estimated 7.5 million people lost federal expanded unemployment benefits on Sept. 6.
Payroll gains last month were led by a 164,000 increase in leisure and hospitality. Professional and business services, transportation and warehousing, and manufacturing also posted significant increases. Government payrolls fell.
Average hourly earnings rose 4.9% in October from a year ago, the most since February. The increase underscores worker’s ability to demand higher pay amid an ongoing labor shortage.
Higher wages could mean that more businesses raise prices to protect margins as the costs of labor, materials and transportation climb, stoking inflation. Prices have increased by the most in three decades on a year-over-year basis, driven by supply chain bottlenecks and shortages.
“We have high inflation and we have to balance that with what’s going on in the employment market," Federal Reserve Chair Jerome Powell told reporters on Wednesday following the FOMC’s policy meeting. “It’s a complicated situation."
October’s gain leaves payrolls 4.2 million below their pre-pandemic level. The pace hiring in the coming months risks being restrained by new Covid flare-ups. Recent data show hospitalizations increasing in 13 states, which could signal another virus wave. Health care payrolls climbed in October by the most this year, led by home health care and nursing.
Through the Company Lens
“The demand for labor has recently coincided with the shortage of available workers, particularly in the United States...It has led to wage increases and sign on incentives as companies compete for workers as well as inconsistent staffing levels in our operations." -- Amazon.com Inc. CFO Brian Olsavsky, Oct. 28 earnings call
“Certainly, the higher wages that you pay, it allows you to stay competitive, but we’re also seeing that is just, it’s very challenging right now in the market to find the level of talent that you need." -- McDonald’s Corp. CEO Chris Kempczinski, Oct. 27 earnings call
“U.S. labor availability remains tight across most industries, driving wage inflation and staffing challenges that have resulted in a small number of our stores, limiting operating hours." -- Yum! Brands Inc. CFO Chris Turner, Oct. 28 earnings call
“It does feel like there’s more options for hourly employment and because of that, that’s putting pressure on the labor markets and hiring for the roles that we need." -- Kimberly-Clark Corp. CEO Michael Hsu, Oct. 25 earnings call
The Labor Department’s report showed average workweek fell to 34.7 hours in October from 34.8 hours a month earlier.
The stagnant labor force participation rate -- the number of Americans either employed or looking for work -- points to challenges with getting people back into jobs. Participation has remained near current levels since August of 2020, due in part to increased retirements and parents leaving jobs for child care purposes.
“There is still ground to cover to reach maximum employment both in terms of employment and in terms of participation," Powell said Wednesday.
This story has been published from a wire agency feed without modifications to the text. Only the headline has been changed.
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