The month of October, just after the summer slowdown has seen a rise in the number of jobs available as firms in the United States hired more workers than projected. Official numbers show that businesses added over 500,000 jobs and the unemployment rate fell to 4.6 percent. The September hiring figures were also revised upwards. Over the summer, the spread of the Delta variety and slower growth had stifled hiring, as well as an evident unwillingness on the part of some workers to return to work.
As a result, many firms are scrambling for workers and finding it difficult to meet rising demand. To attract and keep employees, several companies are hiking wages. According to the Bureau of Labor Statistics, average private sector salaries increased by 11 cents to $30.96 per hour in October. Average salaries have increased by 4.9 percent in the last year, but this hasn’t kept pace with annual inflation, which was at 5.4 percent in September.
September’s revised figures revealed that 312,000 jobs were generated in September, far more than the 197,000 previously reported. August’s numbers were also raised higher, from 366,000 to 483,000. According to the Bureau, considerable gains were made in leisure and hospitality, professional and commercial services, manufacturing, and transportation and warehousing. The statistics as a whole shows a robust upward trend, while job growth remains lower than in the first half of the year.
President Biden took a victory lap after the October jobs data, claiming that the recovery had been faster and better than expected. He said that unemployment was lower this year than it has been since 1950. After several months of discouraging data, the strong jobs report indicates that the economic damage from the Delta wave is finally subsiding. The leisure and hospitality sector, which gained 164,000 employment, was a shining example of this and the benefits didn’t just apply to one industry. Hiring was high in the private sector, notably in professional and commercial services, as well as manufacturing.
However, there is still a significant hole to fill. There are more than four million fewer employment in the country than there were before the outbreak. Even when the economy improves, the labor force participation rate – which gauges the proportion of people who have jobs or are actively looking for work – remains unchanged. A huge number of workers who left the labor market in the United States during the epidemic do not appear to be in any hurry to return. And it’s unclear whether they’ll do so. The US economy is gathering up speed, according to today’s report. However, with persisting supply chain concerns and the unpredictability of the health crisis, it’s anyone’s guess whether this performance can be duplicated.
The data was hailed by analysts as a strong indicator of post-pandemic recovery. “It demonstrates that the jobs market is mending to the point where we could see even bigger improvements next month as more people return to work,” Peter Cardillo, chief market economist at Spartan Capital Securities in New York, said.
Nevertheless, the participation rate, which indicates how many potential employees are employed or looking for employment, remained unchanged, implying that not everyone is ready for a return to normalcy. “The participation percentage sat at 61.6 percent, which is consistent with people’s reluctance to return to work,” said Joe Manimbo, senior market analyst at Western Union Business Services. Some people have been kept out of the labor market due to concerns about Covid infection, childcare issues, relocations, and other lifestyle adjustments. With government assistance ending, children returning to school, and funds built up during the pandemic rapidly depleting, analysts expect more people to return to work. 7.4 million individuals are currently unemployed, down drastically from the peak during the epidemic but still higher than the 5.7 million who were looking for job before to Covid. Before the epidemic, the unemployment rate was 3.5 percent in February 2020.
Principal Global Investors’ chief strategist Seema Shah said it was “a little perplexing” why more individuals were not returning to work. “We should be seeing a recovery in participation at this point, with reduced benefits, a return to in-person schooling, and the decline in Covid rates,” she added. “Is it because the enormous savings cushion is still dragging on the motivation to go back to work? Is it possible that there has been a fundamental shift in the psychology of work?” “Supply chain concerns will only persist” until more workers return, she noted.