US added 531,000 jobs in October as delta eased
The U.S. added 531,000 jobs in October and the unemployment rate dropped 0.2 percentage points to 4.6 percent as the country began to shake off a summer surge of COVID-19, according to data released Friday by the Labor Department.
The October jobs report showed the labor market rebounding after the July emergence of the delta coronavirus variant, exceeding economists’ expectations. Analysts projected the U.S. to gain roughly 450,000 jobs last month and see the unemployment rate drop to 4.7 percent.
Policymakers and economists were hopeful that job growth in October would accelerate after falling far short of expectations in July and August. The beginning of the delta surge toward the middle of the summer derailed a labor market that added more than 1 million workers in June, but optimism rose for stronger October job gains as cases began to fall in September.
“This is the kind of recovery we can get when we are not sidelined by a surge in COVID cases. If this is the sort of job growth we will see in the next several months, we are on a solid path. The public health situation needs to be under control for the US labor market to have a sustained economic recovery,” wrote Nick Bunker, economic research director at Indeed, in a Friday analysis.
Wages also increased by 4.9 percent in the year since last October and average hourly earnings rose by 11 cents to $30.96.
The U.S. added jobs broadly across the economy, with the hard-hit leisure and hospitality sector leading the pack with 164,000 new workers. Professional and business services added 100,000 jobs, manufacturing gained 60,000 jobs, and transportation and warehousing added 54,000 jobs.
The increase in manufacturing was particularly notable after months of meager gains as the industry faces serious supply chain snarls and shortages. The auto industry added 28,000 jobs, a welcome sign after plants laid off thousands of workers amid semiconductor shortages.
Public education was the only sector to lose jobs in October, but federal officials and economists have warned that the pandemic has made school hiring patterns highly unpredictable and volatile.
“Rarely are job reports so clear. There are usually lots of cross-currents. Not in this report. The economic recovery is quickly gaining speed as the economic headwind created by the Delta-wave of the pandemic fades away,” said Mark Zandi, chief economist at Moody’s Analytics, on Twitter.
Labor force participation stayed largely flat 61.6 percent last month, still 1.7 percentage points below its pre-pandemic level. Even so, the number of people who were unable to work because COVID-19 limited their employment fell from 5 million last month, and the number of people prevented from looking for work because of the pandemic fell by 300,000 to 1.3 million.
“The only mild disappointment in the report was labor force participation held steady,” Zandi tweeted.
“We need more people to get back to work,” he continued. “Didn’t happen in October. I expect it to in the next few months.”
The report also included substantial revisions to lackluster gains in August and September, adding 117,000 jobs to August’s gains of 366,000 and 118,000 jobs to September’s gain of 194,000. The revisions added a total of 225,000 jobs across two months.
The release of the October jobs report comes at a crucial stretch for President Biden and Democrats, who are attempting to cement major pillars of his economic agenda in the House before Thanksgiving. The president and his party are attempting to regain popular support after Republican candidates outperformed expectations in elections across the U.S. Tuesday.
The delta-driven slowdown in job growth and rise in inflation has created difficult political obstacles for Biden. Republicans have sought to pin the economic speed bumps on Biden and the Democratic agenda as rising inflation also stoked concerns among some moderate Democrats.
“With school back in session and enhanced unemployment benefits expiring, this month’s 531,000 jobs added are a welcome improvement over last month, but our labor market is still operating well below its potential,” said Sen. Mike Lee (R-Utah), vice chairman of the Joint Economic Committee.
“New mandates, higher taxes, and more spending are not the answer,” Lee continued.
Biden administration officials, Democratic lawmakers and some economists counter that both the bipartisan infrastructure bill and larger social services and climate package would boost the economy’s productive potential. They’ve also pointed to a series of tax increases on the wealthy and corporations expected to cover the cost of the measures, limiting its impact on inflation and the national debt.
House Democratic leaders are pushing to vote Friday on both pieces of legislation, though it could be several weeks before they reach Biden’s desk. While the bipartisan infrastructure bill has already passed the Senate, House progressives have insisted on passing all of Biden’s agenda together as moderate senators pushed for significant cuts.
“In spite of supply chain woes, a burgeoning trade deficit, and a lack of action on Capitol Hill on much-needed investments, manufacturing is still growing,” said Scott Paul, president of the Alliance for American Manufacturing.
“We’re committed to keeping our policymakers focused on making these new investments in American manufacturing and shaping a trade policy that is worker-centered.”
Updated at 9:35 a.m.