Employers shrug off virus, step up hiring
U.S. added 531,000 jobs last month as unemployment rate fell 4.6 percent
WASHINGTON — America’s employers accelerated their hiring last month, adding a solid 531,000 jobs, the most since July and a sign that the recovery from the pandemic recession is overcoming a virus-induced slowdown.
Friday’s report from the Labor Department also showed that the unemployment rate fell to 4.6 percent last month from 4.8 percent in September. That is a comparatively low level, though still well above the pre-pandemic jobless rate of 3.5 percent. And the job gains in August and September weren’t as weak as initially reported: The government increased its estimate of hiring for those two months by a hefty combined 235,000 jobs.
All told, the figures point to an economy that is steadily recovering from the pandemic recession, with healthy consumer spending prompting companies in nearly every industry to add workers. Though the effects of COVID-19 are still causing severe supply shortages, heightening inflation and keeping many people out of the workforce, employers are finding gradually more success in filling near recordhigh job postings.
“This is the kind of recovery we can get when we are not sidelined by a surge in COVID cases,” said Nick Bunker, director of economic research at the employment website Indeed. “The speed of employment gains has faltered at times this year, but the underlying momentum of the U.S. labor market is quite clear.”
The better-than-expected jobs report was welcomed on Wall Street, where investors sent stocks further into record territory. The Dow Jones Industrial Average was up nearly 200 points, or roughly 0.5 percent, in earlyafternoon trading. Shortterm Treasury yields rose as some investors moved up their expectations for when the Federal Reserve will begin raising interest rates. But
longer-term yields dipped amid muted expectations for inflation over the long term.
By most barometers, the economic recovery appears solidly on track. Services companies in such areas as retail, banking and warehousing have reported a sharp jump in sales. Sales of new and existing homes surged last month. And consumer confidence rose in October after three straight declines.
At the same time, though, the nation remains 4.2 million jobs short of the number it had before the pandemic flattened the economy in March 2020. The effects of the virus are still discouraging some people from traveling, shopping, eating out and attending entertainment venues.
In October, the pickup in hiring was spread across nearly every major industry, with only government employers reporting a job loss, mostly in education. Shipping and warehousing companies added 54,000 jobs. The battered leisure and hospitality sector — which includes, restaurants, bars, hotels and entertainment venues — gained 164,000. Manufacturers, despite their struggles with supply shortages, added 60,000, the most since June 2020.
And employers, who have been competing to fill jobs from a diminished pool of applicants, raised wages at a solid clip: Average hourly pay jumped 4.9 percent in October compared with a year earlier, up from 4.6 percent the previous month. Even a gain that strong, though, is barely keeping pace with recent surges in consumer inflation.
Those price increases pose a headwind for the economy. Higher costs for food, heating oil, rents and furniture have burdened millions of families. Prices rose 4.4 percent in September compared with 12 months earlier, the sharpest such jump in three decades.
Job prospects are brightening even for people who have been out of work for prolonged periods. The number of long-term unemployed — people who have been jobless for six months or more — has fallen sharply in recent months, to 2.3 million in October from 4.2 million in April. That’s still double the pre-recession total. But it’s an encouraging sign because employers are typically wary of hiring people who haven’t held jobs for an extended time.
At the same time, disparities in the job market have persisted. The Black unemployment rate was unchanged in October at 7.9 percent, for example, while for white workers, it fell to 4 percent from 4.2 percent. The Latino jobless rate dropped to 5.9 percent from 6.3 percent.
And though white-collar jobs in professional services like information technology, engineering and architecture are nearly back to their pre-pandemic employment levels, leisure and hospitality still has 1.4 million fewer jobs.
Hari Ravichandran, CEO of digital security provider Aura in Boston, says his 800-person company has 140 positions open, mostly in software development, and has raised pay 25 percent in just the past nine months.
Ravichandran is willing to hire remote workers; 170 of his staffers have never regularly worked in any of the company’s buildings. Still, hiring remains as tough as he’s ever experienced.
One disappointing note in Friday’s report is that the workforce — the number of people either working or looking for a job — was unchanged in October. That suggested that the reopening of schools in September, the waning of the virus and the expiration of a $300-a-week federal unemployment supplement have yet to coax many people off the sidelines of the job market.
Drawing many people back into the workforce after recessions is typically a prolonged process. There are now 7.4 million people officially out of work — just 1.7 million more than in February 2020, before the pandemic struck the economy. Yet millions more who lost jobs during the recession have given up their job hunts, and employers might have to raise pay and benefits to draw them back in, said Aaron Sojourner, a labor economist.
Even so, some companies still can’t find enough workers. Many parents, particularly mothers, haven’t returned to the workforce after having left jobs during the pandemic to care for children or other relatives. Yet there was evidence of a small rebound last month: The proportion of women either working or looking for work rose after two months of declines.