NEW YORK— After disappointing September data, America's jobs numbers strongly rebounded in October with the Department of Labor reporting U.S. employers added 531,000 positions.
The unemployment rate fell to 4.6%, the lowest level since the economic recovery started in May 2020.
Economists with both credit union trade associations largely see positives in the numbers and forecast it could mean an increase in rates sooner than some expect.
It’s All About the COVID
“The October jobs report was generally positive, meeting expectations for the headline number and delivering healthy upward revisions to prior months,” said NAFCU Chief Economist and Vice President of Research Curt Long.“Even with the revisions, October was substantially stronger than August and September for employment growth, which is consistent with the view that the delta variant was weighing heavily on the labor market. The number of employees reporting that they were unable to work due to pandemic-related business closures fell from five million to 3.8 million during the month. Employment growth should remain solid as long as COVID cases are well contained.”
A ‘Return to Normal’
“The job market showed strong growth in October, as expected, after two months of disappointing performance. As the Delta variant continues to decline, employment in leisure and hospitality is rebounding, signaling a return to normal economic activity,” said. CUNA Senior Economist Dr. Dawit Kebede. “This is good news for the Federal Reserve who announced it will start tapering off its asset purchase program later this month. As wages continue to rise and inflation concerns increase, a consistently strong job market makes it easier for the Federal Reserve to raise interest rates, if needed, earlier than planned.
“The labor force participation rate remains constant and is 1.7 percentage points lower than pre-pandemic rates despite declining COVID-19 cases and the federal government ending supplemental unemployment benefits,” Kebede continued. “This contradicts the expectation that we will start to see an increase in labor force participation this fall.”
Across the Board Gains
According to the newest federal data, the U.S. economy gained jobs across the board last month, with leisure and hospitality, manufacturing and transportation and warehousing leading the job gains.
The newest job additions follow the 795,000 jobs added in August and September.