WATCH: Biden touts 531,000 job growth in October
WASHINGTON (AP) – US employers stepped up hiring in October, adding 531,000 solid jobs, the most since July and a sign that the recovery from the pandemic recession could overcome a virus-induced slowdown.
Watch Biden’s remarks in the video player above.
Friday’s Labor Department report also showed the unemployment rate fell to 4.6% last month, from 4.8% in September. This is a relatively low level but still well above the pre-pandemic unemployment rate of 3.5%.
The emergence of the pandemic economy, by most measures, remains on track. Service companies in areas such as retail, banking and warehousing reported strong sales increases. More Americans bought new homes in the past month. And consumer confidence rose in October.
Nevertheless, the recovery should strengthen thanks to a sustained acceleration in hiring. The economy grew at a healthy 6.5% annual rate in the first half of the year, as vaccinations spread and Americans became more willing to travel, shop, shop, and go. eat out and attend entertainment events. Yet the delta variant kept economic growth in the July-September quarter at just 2% per year and significantly slowed hiring.
Recent economic indicators give a picture of hope. After several rounds of stimulus checks and other government support payments, Americans as a whole have amassed about $ 2.5 trillion more in savings than before the pandemic. As this money is spent, it will likely fuel new economic activity.
The Conference Board, a research group on business, said in its October Consumer Confidence Survey, the proportion of Americans who said they plan to buy cars, homes or wholesale household appliances had increased. And nearly half of survey respondents said they plan to take a vacation in the next six months – the highest proportion of this type since February 2020, before COVID-19 devastated the economy. .
Yet some companies say they still can’t find enough workers to fill the positions. Many parents, especially mothers, have not returned to the workforce after quitting their jobs during the pandemic to care for children or other loved ones. Defying the predictions of some, the expiration of a federal unemployment supplement of $ 300 per week has not pushed more people to look for work. About 5 million fewer people have jobs today than before the pandemic.
Most economists hope that with vaccinations helping suppress the delta wave, more people will seek and find jobs because they are no longer sick or caring for someone who is or because. that they no longer fear being infected. These health problems had excluded more people in September than in previous months.
American workers, who now enjoy more leverage in the labor market than they have in decades, are receiving solid pay increases. The allure of higher incomes could encourage more people to retire and look for work again. Salaries and wages in the July-September quarter, compared to the previous year, increased the most in 20 years. Most of those gains, however, have gone to already employed people who quit their jobs: the number of people who quit, mostly to take on new positions, has hit an all-time high.
Rising inflation, however, has eroded much of the value of those wage increases and has become the most serious headwind for the US economy. The higher costs of food, fuel, rent and furniture have weighed on millions of families. Prices rose 4.4% in September from 12 months earlier, the largest such increase in three decades.
This surge in inflation has been one of the main reasons the Federal Reserve announced this week that it would start cutting the stimulus it has given to the economy since the pandemic recession hit the last year. The Fed will do this by cutting back on its monthly bond purchases, which are meant to hold down long-term interest rates to stimulate borrowing and spending.
President Jerome Powell has suggested that it will not be possible to have a clear picture of the health of the labor market until the impact of COVID-19 further diminishes, which could take months.
Yet, in the meantime, there are plenty of signs the economy is healing: the number of people claiming unemployment benefits for the first time has fallen for a fifth consecutive week, to a level almost as low as the pace of claims. unemployment before the pandemic. 20 months ago.
And while hiring has slowed down for the time being, consumers as a whole have strong financial backings. After several rounds of stimulus checks and other government support payments, Americans as a whole have amassed about $ 2.5 trillion more in savings than before the pandemic. As this money is spent, it will likely fuel new economic activity.