October Jobs - Now We're Cooking With Gas

Payroll additions and unemployment rate both better than expected in October.  The U.S. labor market showed promise in October with higher-than-forecast and broad-based payroll gains indicating stronger progress filling millions of open positions.  Last month, we highlighted our view that school re-openings and expiry of expanded unemployment benefits should support more hiring into year-end especially if Delta cases continued to decline.  Accelerated hiring in October is likely a reflection of those dynamics playing out.  Average hourly wages were up 4.9% compared to a year ago highlighting workers ability to demand higher pay as demand for labor continues to outpace supply.

531K payrolls added in October – higher than forecast; September figures revised higher.  The U.S. labor market added 531K payrolls in October, marking acceleration from 312K in September (revised from +194K originally reported).  Forecasts ranged from +250 to +700K with a median of +450K.  Job gains were broad-based – the hard hit leisure and hospitality sector accounted for 119K or 22% of payroll additions, followed by professional and business services (100K; 19%) and manufacturing (60K; 11%).  Leisure and Hospitality has added back 2.4M jobs in 2021, but still counts 1.4M fewer payrolls relative to February 2020.

6% unemployment rate better than expected.  The U.S. unemployment rate improved 0.2% to 4.6% in October.  Forecasts ranged from 4.5% to 4.9% with a median of 4.7%.  Labor force participation held steady at 61.6% – this is essentially where it has been since last summer, two points lower than pre-pandemic levels and largely attributable to retirements.