Washington, November 5 (BNA): Employers in America ramped up hiring last month, adding 531,000 jobs, the largest number since July, and a sign that the recovery from the pandemic recession is overcoming the slowdown caused by the virus.
Friday’s report from the Labor Department also showed that the unemployment rate fell to 4.6% last month from 4.8% in September. This is a relatively low level although still well above the pre-pandemic unemployment rate of 3.5%.
The report showed that job gains in August and September were not as weak as initially reported.
The Associated Press (AP) reported that the government revised its employment estimates for these two months by adding 235,000 jobs.
Finally, the numbers in the jobs report point to the economy steadily recovering from the pandemic recession, with healthy consumer spending prompting companies in nearly every industry to increase hiring.
Although the effects of COVID-19 continue to cause severe supply shortages, driving up inflation and keeping many people out of the workforce, employers are gradually finding more success in filling record-breaking vacancies.
“This is the kind of recovery we can have when we are not affected by the increase in COVID cases,” said Nick Bunker, director of economic research at job site Indeed. “The pace of employment gains has faltered at times this year, but the underlying momentum of the US labor market is quite clear.”
By almost every measure, the economic recovery appears firmly on track.
Service companies in areas such as retail, banking and warehousing recorded a sharp jump in sales.
More Americans bought new homes last month. Consumer confidence rose in October.
At the same time, though, the nation is still 4.7 million fewer jobs than it was before the pandemic flattened the economy in March 2020. The effects of the virus are still discouraging some people from traveling, shopping, dining out, and attending entertainment.
In October, the recovery in employment spread to nearly every major industry, with only government employers reporting job losses. Shipping and warehousing companies posted a gain of 54,000 jobs.
Retailers added 35,000. The battered leisure and hospitality sector, which includes restaurants, bars, hotels and entertainment venues, generated 164,000 jobs. Manufacturers, despite struggling with supply shortages, added 60,000 jobs, the most since June 2020.
And employers, who have been vying to fill jobs from a dwindling pool of applicants, have raised wages at a flat rate: Average hourly wages jumped 4.9% in October from a year earlier, up from 4.6% the previous month.
Even gains this strong, though, barely kept pace with recent increases in consumer inflation.
The number of long-term unemployed – people who have been out of work for six months or more – have fallen sharply in recent months, to 2.3 million in October from 4.2 million in April. That’s still double the pre-recession total.
But it’s an encouraging sign because employers are usually wary of hiring people who haven’t held jobs for a long time.
One disappointing note in Friday’s report is that the workforce – the number of people working or looking for a job – was unchanged in October.
It suggests that the reopening of schools in September, the virus waning, and the expiration of the $300-a-week federal unemployment supplement haven’t convinced many people to walk away from the labor market fringes in droves.
Attracting many people into the workforce after downturns is usually a lengthy process. There are now 7.4 million officially unemployed people – just 1.7 million more than in February 2020, before the pandemic hit the economy.
However, millions of others who lost their jobs during the recession have given up looking for jobs, and employers may have to raise wages and benefits to attract them back.
During the first half of the year, the economy grew at a healthy annual rate of 6.5% as vaccinations spread and Americans showed themselves more willing to travel, shop, eat out and attend fun events.
However, the delta variable kept economic growth in the July-September quarter to an annual rate of just 2%.
Modern economic metrics have produced a bright picture. And after several rounds of stimulus checks and other government support payments, Americans as a whole have amassed $2.5 trillion more in savings than they had before the pandemic.
And as this money is spent, it will likely fuel more economic activity.
The Conference Board, a trade research group, said in its October consumer confidence survey that the percentage of Americans who said they plan to buy cars, homes or major appliances all rose.
Nearly half of those surveyed said they plan to take a vacation in the next six months – the highest percentage since February 2020, before the coronavirus swept the economy.
However, some companies are still unable to find enough workers to fill positions.
Many fathers, especially mothers, have not returned to the workforce after leaving their jobs during the pandemic to care for children or other relatives. However, there was evidence of a slight rebound last month: The proportion of women working or looking for work rose in October after two months of decline.
Rising inflation has cast a shadow over the economy since this spring.
The rising costs of food, heating oil, rent and furniture have weighed on millions of families. Prices rose 4.4% in September compared with 12 months before, the largest such increase in three decades.
This high inflation was a major reason why the Federal Reserve announced this week that it will start easing the stimulus it has provided to the economy since the pandemic recession hit last year.
The Fed will do this by reducing its monthly bond purchases, which were intended to lower long-term interest rates to stimulate borrowing and spending.
NS