US Labor Market Sees Strong Growth in Payrolls Gain

The US labor market appears to recover and return to normal, with a higher-than-forecast payroll gain recorded last month.

In October, US employers hired more new workers than expected after a major slowdown over the summer. According to official figures, there were 531,000 more jobs, causing the unemployment rate to drop slightly from 4.8% to 4.6%.

A Labor Department report issued on Friday showed that October nonfarm payrolls had risen after two upward revisions in September and August.

In September, revised data showed that more jobs had been created than initially reported that month, with 312,000 instead of 197,000. Also, August figures showed an increase from 366,000 to 483,000 posts.

Over the summer, hiring was affected by the spread of the more contagious Covid-19 Delta variant, slower growth, and the apparent employees’ reluctance to return to their work.

Consequently, many employers have struggled to meet the growing demand for staff, and some have offered higher wages to attract workers.

Average private-sector wages rose only 11 cents last month to $30.96 an hour, figures from the Bureau of Labor Statistics showed. However, October’s adds to strong salary increases logged in the past six months.

Moreover, the 4.9% growth in average hourly earnings over the previous year has also exceeded annual inflation, currently at 4.4%. It represents the largest increase since February and allows workers to demand higher wages amid a labor shortage.

Official figures also showed that the payroll gains had been led by over 164,000 jobs in the leisure and hospitality sector. There were also significant increases in manufacturing, business and professional services, and transportation and warehousing sectors, the Office said.

After October gains, payrolls were 4.2 million below their pre-pandemic level. In addition, the hiring’s constant pace could be limited by new Covid-19 outbreaks in the coming months.

However, US analysts welcomed the report with enthusiasm, saying that it was a strong indication of post-pandemic healing and showed that the country was experiencing a recovery in the labor market.