Total nonfarm payroll employment increased by 531,000 in October, a large boost from 194,000 new positions in September, according to the latest jobs report from the U.S. Bureau of Labor Statistics.
“The October report was exactly what we needed to see—after a big tumble during the height of the delta variant, the economy appears to be back on track,” Ali Wolf, chief economist for Zonda, says. “Job gains in October ran the gamut, from retail to restaurants, warehouses, health care, and consulting firms.”
The unemployment rate decreased by 0.2 percentage points in October to 4.6%. The number of unemployed persons continues to trend downward from their highs at the end of the February-April 2020 recession. The number of unemployed individuals in October, 7.4 million, and the unemployment rate remained above pre-pandemic levels in February 2020, when the unemployment rate was 3.5% with 5.7 million unemployed individuals.
“The labor force participation rate held steady at 61.6% as many workers are still hesitant to return to the labor force for various reasons,” says Doug Duncan, chief economist at Fannie Mae. “Labor force participation continues to recover slowly and is still 1.7 percentage points below the February 2020 level. The number of persons working part-time but who would prefer full-time employment was essentially unchanged again in October after declines earlier in the year, though average hourly earnings grew in October at a 4.9% year-over-year pace. This robust wage growth is a further signal that firms are looking to hire.”
Among the unemployed, the number of permanent job losers, 2.1 million, changed little from August but is 828,000 higher than in February 2020. The number of persons on temporary layoff also was little changed in October at 1.1 million, much lower than its high of 18 million in April 2020. The number is up 306,000 from pre-pandemic levels in February 2020. The number of long-term unemployed decreased by 357,000 to 2.3 million, but remains 1.2 million higher than in February 2020. Long-term unemployed accounted for 31.6% of the total unemployed in October.
According to the Household Survey Supplemental Data, 11.6% of employed individuals teleworked because of the pandemic in October, down from 13.2% in September. During the month, 3.8 million persons reported they had been unable to work because their employer closed or lost business due to the pandemic, down from 5 million in September. Of the 3.8 million, 13.3% received at least some pay from their employer for the hours not worked. Among those not in the labor force, 1.3 million persons were prevented from looking for work due to the pandemic, down from 1.6 million in September.
According to the report, the largest job growth occurred in leisure and hospitality, professional and business services, manufacturing, transportation, and warehousing. Employment in public education decreased over the course of October.
“While October’s job report was great, it also reminds us of the economy’s vulnerabilities,” Wolf says. “Different COVID variants, an ongoing worker shortage, today’s skills gap, and the remains of the K-shaped recovery still pose a risk to a universal and healthy labor market.”
Construction employment rose by 44,000 in October, following a 30,000 increase in September. Employment increased in nonresidential specialty trade contractors and in heavy and civil engineering construction, according to the jobs report. Overall construction employment is 150,000 below its February 2020 level.
“Residential construction employment (including specialty trade contractors) grew by nearly 11,000 last month, an acceleration from September’s pace and a welcome sign for a sector dealing with a backlog of orders,” Duncan says. “We believe this may help alleviate the supply constraints present in this sector.”
