WASHINGTON (AP) – US employers increased recruitment in October, adding 531,000 jobs, the most since July, a sign that the recovery from the pandemic recession is overcoming the virus-driven recession.
Friday’s Labor Department report also showed that the unemployment rate fell to 4.6% last month from 4.8% in September. This is a relatively low rate, but still significantly higher than the pre-pandemic unemployment rate of 3.5%.
By most indicators, the economy continues to recover from the pandemic. Companies providing services in areas such as retail, banking and warehousing reported a sharp jump in sales. More and more Americans bought new homes in the past month. And consumer confidence rose in October.
However, the recovery will gain momentum thanks to a sustained acceleration in hiring. The economy grew at a healthy 6.5% per annum in the first half of the year as vaccinations spread, and Americans showed a greater willingness to travel, shop, eat out, and attend recreational activities. Nevertheless, the delta option provided economic growth in July-September up to 2% per annum and slowed down hiring.
Friday’s report showed not only that employers accelerated hiring in October, but also that job growth in August and September was not as weak as initially reported. The government has revised the hiring estimate for the two months at 235,000 jobs.
In the past month, hiring has spread to nearly every major industry, with only government employers reporting job loss. Shipping and warehouse companies have created 54,000 jobs. Retailers added 35,000 units. The badly hit leisure and hospitality sector, which includes restaurants, bars, hotels and entertainment venues, has created 164,000 jobs.
And employers, who were competing to fill jobs from a shrinking pool of job seekers, raised wages by solid levels: average hourly wages jumped 4.9% in October from a year earlier. However, even such strong gains are barely keeping pace with the recent surge in consumer price inflation.
Recent economic indicators have created an encouraging picture. 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. As this money is spent, it is likely to fuel further economic activity.
The Board Conference, a business research group, reported that in the October survey of consumer confidence, the proportion of Americans who said they planned to buy cars, homes, or large appliances rose. And nearly half of respondents said they were planning a vacation in the next six months – the highest since February 2020, before COVID-19 tore apart the economy.
However, some companies say they still cannot find enough workers to fill vacancies. Many parents, especially mothers, did not return to work after leaving work during the pandemic to look after children or other relatives. Contrary to some predictions, the expiration of the $ 300 per week federal unemployment bonus has not prompted more people to look for work. About 5 million fewer people now have jobs than they did before the pandemic.
Most economists hope that with vaccinations to help suppress the delta wave, more people will seek and find work because they no longer get sick and care for those who are sick, or because they are no longer afraid of being infected. Due to these health problems, more people were stopped in September than in previous months.
Bringing in higher incomes can encourage more people to leave and look for work again. Wages in July-September jumped the most in 20 years compared to last year. Most of that income, however, went to already employed people who quit their jobs: the number of people quitting, mostly to take up new jobs, reached record levels.
Rising inflation, however, has largely undermined the value of these wage increases and has become the most serious obstacle to the US economy. Higher costs for food, heating oil, rents and furniture have become an onerous burden for millions of families. Prices rose 4.4% in September from 12 months earlier, the steepest rise in three decades.
This spike in inflation was the key reason the Federal Reserve announced this week that it would begin to phase out the stimulus it provided to the economy after last year’s pandemic recession. The Fed will do this by cutting monthly bond purchases, which were designed to contain long-term interest rates in order to stimulate borrowing and spending.
Chairman Jerome Powell suggested that it will not be possible to get a clear picture of the state of the labor market until the impact of COVID-19 diminishes, which could take months.
However, in the meantime, there are many signs that the economy is recovering: the number of people applying for unemployment benefits for the first time fell for the fifth consecutive week to a level almost as low as the number of jobless claims before the pandemic. 20 months ago.
And while recruitment has slowed so far, consumers generally have a solid financial cushion. 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. As this money is spent, it is likely to fuel further economic activity.