Last week, the Bureau of Labor Statistics reported the economy added 531,000 jobs in October, well above the consensus estimate of 450,000.
Wages rose 0.4% from September (4.9% on an annual basis), the unemployment rate fell to 4.6%, and the labor force rose 104,000.
Why it matters: This was an encouraging report all around. Every industry except government (-73,000) gained jobs in October. Leisure and hospitality (+164,000), professional and business services (+100,000), education and health (+64,000), and manufacturing (+60,000) were the biggest gainers.
- Further encouraging news was that August and September numbers were revised up by a combined 235,000.
But: The only criticism is that the labor force only grew 104,000. We’d like to see more workers rushing back into the market to fill those more than 10 million job openings.
- At the October pace, it would take eight more months to get back to pre-pandemic employment levels.
- Despite strong job growth, labor participation lags. The participation rate is 1.7 percentage points below pre-pandemic. If we had the same participation rate as February 2020, there would be 4.3 million more workers in the labor force.
- The employment-population ratio is 2.3 percentage points below pre-pandemic level. If the it was the same as February 2020, there would be 2.8 million more workers employed.
—Curtis Dubay, Senior Economist, U.S. Chamber of Commerce