U.S. job growth rebounded after slowing growth for two consecutive months, as pandemic-related concerns kept workers on the sidelines, leading to “broad” growth, especially in the leisure and hospitality industries.
Employers in the world’s largest economy added 531,000 jobs in October, higher than the 312,000 jobs created last month, and close to the average of about 580,000 months since the beginning of the year. Economists had previously expected employment to increase by 450,000.
The unemployment rate fell again in October, dropping to 4.6%. This is lower than the 4.8% in September and well below the 5.9% level in June.
According to data released by the U.S. Bureau of Labor Statistics on Friday, employment growth was “broad”, with “significant” growth in multiple industries.
The number of leisure and hotel jobs increased by 164,000 in October, mainly due to the increase in the number of hiring at food and beverage establishments. This is the highest level since July, but it is still 1.4 million below the pre-pandemic level.
Professional and business services added 100,000 jobs, manufacturing jobs increased 60,000 jobs, and retailer jobs increased 35,000 jobs.
Thomas Simons, an economist at Jefferies, said that the private sector drove the October rise and that state and local government employment figures were “weak” this month. He cited the “seasonal difference” when the school reopened.
Employment in local and state government education and state government education decreased by 65,000.
Tom Porcelli, chief US economist at RBC Capital Markets, said: “We are ready to roughly return to pre-pandemic levels in the coming year.” “This is a highly affirmative call.”
US President Joe Biden said in a speech on Friday that this is another “great day” of recovery from the pandemic and praised the stimulus plan he passed earlier this year for laying the foundation for the gains made.
“Our economy is developing,” Biden said.He also urged Congress to pass his Consumer bill It is currently being debated, saying that this will “end some of the people’s anxiety about the economy.”
The data was released at a critical moment in the recovery of the labor market, which has lost some momentum in recent months.
Although the unemployment rate has fallen sharply since June, Job creation has also slowed sharply Since the summer, the U.S. economy has added about 1 million jobs every month, achieving strong growth.
But the alarming spread of the more contagious Delta variant of Covid-19 has shortened this progress and exacerbated the already Severe worker shortage This left a record number of vacancies.
Before this month’s revision, the September report only added 194,000 people, which was far below expectations at the time, and a sharp decline compared to the previous period.
Economists pointed out that the reduction in coronavirus cases across the country and the expansion of vaccination campaigns in the past month helped to alleviate many of the constraints that hindered Americans from returning to the labor market, ultimately driving employment growth in October.
The latest news on the U.S. employment situation is when the Federal Reserve announced that it would Start to shrink Later this month, its $120 billion monthly asset purchase plan made “substantial further progress” in achieving maximum employment and an average of 2% inflation.
Despite reaching this milestone, Federal Reserve Chairman Jay Powell emphasized that there is more room for the US economy to make up for before considering substantive measures to tighten monetary policy.
When asked about the Fed’s views on raising interest rates, Powell repeatedly emphasized that the labor market has not yet recovered to a sufficient degree, so such measures need to be taken.
The central bank has stated that it will maintain interest rates at current levels close to zero until it achieves maximum employment and an average of 2% inflation over time.
Compared with pre-pandemic levels, about 4 million Americans are still unemployed, and the labor force participation rate—tracking the number of Americans who are employed or looking for work—has not yet fully recovered.
NatWest Markets chief US economist Kevin Cummins (Kevin Cummins) said that the overall participation rate failed to drop to 61.6% from last month, far below the 63% level in February 2020.
Porcelli pointed out that for “golden age” workers between 24 and 54 years old, the situation has improved significantly since the summer, but their participation rate is still about 1 percentage point lower than the pre-pandemic level of 82.9%.
The employment-to-population ratio of these workers (tracking the percentage of Americans in the current working age group) improved in October, rising from 78% last month to 78.3%. This is the highest level since the beginning of 2020.
At a press conference after the two-day policy meeting on Wednesday, Powell stated that as the Covid-19 risk further subsides, the “barriers” to labor supply should be “reduced,” which may lead to jobs again soon. Increase.
He also added that if the growth rate this year continues, it is possible to maximize employment in the second half of next year.
The urgency to intensify the Fed’s policy discussions is the soaring inflation. Facts have proved that inflation is more persistent and widespread than expected. Wages are also rising, again in October.
The average hourly wage increased by 0.4% month-on-month, and the annual growth rate was 4.9%.
According to Powell, current inflationary pressures are not due to “tight labor markets”, but reflect supply chain bottlenecks and other shortages.
After the recent employment data was released, short-term US government bonds were sold off, and the two-year US Treasury yield rose by 0.02 percentage points to 0.44%. As the US stock market rose, the benchmark 10-year Treasury bond yield fell 0.06 percentage points to 1.467% in midday trading.