Hiring picked up in October, with payrolls gaining 531k jobs. That came on top of a large upward revision to September’s tally, which is now a solid 312k gain. In total, hiring in August and September was revised up by 235k jobs. Nonfarm employment remains 4.2 million jobs, or 2.8%, below its pre-pandemic level.
The unemployment rate fell 0.2 percentage points to 4.6%, a tick lower than market expectations. Household survey employment, which is typically more volatile on a month-to-month basis than payrolls, rose 359k jobs, while the labor force participation rate was unchanged at 61.6%.
Job gains were broad based across the private sector, led by leisure and hospitality (+164k), professional and business services (+100k), manufacturing (+60k) and transportation and warehousing (+54k). Leisure and hospitality remains the hardest hit sector, with employment still 8.2% below pre-pandemic levels and accounting for one third of the total nonfarm job deficit. In contrast, employment in transportation and warehousing is 149k above its pre-pandemic level, supported by gains in warehousing and storage and couriers and messengers.
Elsewhere job gains were also seen in construction (+44k), health care (+37k), retail trade (+35k) other services (+33k), finance (+21k) and wholesale trade (+14k).
Once again, education jobs fell at the local (-43k) and state (-22k) level, as pandemic related staffing fluctuations have distorted the normal seasonal patterns.
Average hourly earnings were up 4.9% from a year ago in October, as a healthy demand for workers is driving wages higher across sectors.
Key Implications
Well that is more like it. The U.S. job market shook off its malaise in October as the impacts from Delta fade. Job gains were widespread and the unemployment rate continued to tick down.
The persistent gray cloud over the labor market recovery has been the slow improvement in labor force participation, and there was no progress on that front in October despite more kids in real school and the end of pandemic unemployment supports. We still expect participation to improve going forward as higher wages help to lure more people back to the job market.
