After a sluggish economic picture in September, in October, total nonfarm payroll employment rose by 531,000, and the unemployment rate edged down by 0.2 percentage point to 4.6 percent, the lowest rate since the pandemic began.
This follows a somewhat mixed picture in prior months, including:
- A slower-than-expected report in September
- The summer‘s roaring recovery trajectory
- Better than expected growth in June, especially in travel
- Strong signs of recovery in May
- An anemic April jobs report
Highlights from the October Jobs Report
For those attempting to read the tea leaves, the fall in the unemployment rate continues encouraging signs for the economy, though the rate needs to fall even further to match its pre-pandemic level of 3.5 percent.
The job growth was generally widespread with notable gains in leisure and hospitality, in professional and business services, in manufacturing, and in transportation and warehousing.
Strong Gains in Leisure and Hospitality
- Employment in leisure and hospitality was up by 164,000 in October and has risen by 2.4 million thus far in 2021, showing strong desire on the part of consumers to resume travel activity. In October, this growth was focused in food services and drinking places (+119,000 jobs) and by 23,000 in accommodation. Employment in leisure and hospitality is down by 1.4 million, or 8.2 percent, since its pre-pandemic level.
Growth in Management, Professional and Business Services
- Professional and business services saw good job growth in October, with an addition of 100,000 jobs, including a gain of 41,000 in temporary help services. Employment continued to rise in management and technical
consulting services (+14,000), other professional and technical services (+9,000), scientific research and development services (+6,000), and legal services (+5,000). Employment in professional and business services needs to gain 215,000 more jobs to reach its pre-pandemic level.
- Retail trade saw some increases as well (+35,000). Here, the gains were focused on food and beverage stores (+16,000), general merchandise stores (+15,000), health and personal care stores (+8,000), and electronics and appliance stores (+6,000). These gains were partially offset by a job loss in building material and garden supply stores (-10,000). Retail trade employment is 140,000 lower than its level in February 2020.
Other Key Gains
- Employment in manufacturing was up in October by some 60,000 jobs in October.
- Health care added 37,000 jobs in October, with most of the gain occurring in home health care services (+16,000) and nursing care facilities (+12,000). Employment in health care is down by 460,000 since February 2020.
- Employment in financial activities rose by 21,000 in October and has returned to its February 2020 level. Over the month, job growth occurred in real estate and rental and leasing (+12,000) and in securities, commodity contracts, and investments (+11,000).
What economic experts are monitoring:
- Inflation: This is a real concern among economists, because inflation rose 0.9 percent last month from September. Consumer prices have rises over six percent in the past year, which is the fastest rate of inflation since 1990.
- Supply chain disruptions: these are also affecting prices as factories scramble to make goods and transport strains under higher fuel prices and a shortage of transportation options.