Unemployment Rate Drops Further to 4.6%
After two months of unexpectedly slower growth, the pace of new job creation picked up steam, reaching 531,000 jobs in October. This was after upward revisions for the prior two months resulted in a combined increase of 235,000 to 483,000 for August and 312,000 for September.
The sectors reporting the highest activity in October were again leisure and hospitality, professional and business services, and transportation and warehousing. Manufacturing also saw improvement, while employment in public education again declined.
Lowering by another 0.2%, the unemployment rate continued its steady improvement further, slipping to 4.6%.
Average hourly wages rose for the seventh consecutive month. Over the past 12 months, they have increased by 4.9%.
The average work week decreased to 34.7 hours.
TEMPORARY JOB TRENDS:
Sector performance strengthened in October, with the creation of 41,100 new jobs. Losses reported in the prior two months have since been reversed to show positive traction in both August and September as well.
WHAT DOES IT ALL MEAN?
The stronger pace of job growth in October offered a more positive outlook that came closer to meeting economists’ expectations than in the past few months. Despite this month’s positive news, the labor force participation rate remains below pre-pandemic levels. As more people pick up new jobs and fewer work remotely, there appears to be an easing of coronavirus fears. At the same time, the expiration of government support to individuals may spur more people to move off the sidelines, although it is unclear what impact job loss relating to vaccine mandates may have.
Overall, this month’s report may signal greater optimism as we move toward year-end. People are anxious to put the pandemic behind them and getting back to work is one way to do that. It may require some reskilling and an adjustment of expectations, both on the part of employees and employers. A growing skills gap and continuing challenges in recruiting are contributing to transformation in the workplace as employers look for new approaches to finding, engaging and retaining talent.