Employment Rebounds With 531,000 New Jobs Added In October

The U.S. job market rebounded in October, adding 531,000 non-farm payroll jobs and dropping the unemployment rate to 4.6%, according to data from the Department of Labor.

Central to this surge in growth was job creation in the leisure and hospitality sector, which recorded 164,000 hires as more establishments reopened for service and more Americans booked vacations amid decreasing cases of COVID-19. Other sectors that posted growth include professional and business services, manufacturing, healthcare and construction.

This growth was presaged earlier in the week by strong private payroll projections and other surveys that showed continuing strength in the U.S. service sector over the past month. These new numbers should be welcome news for markets and policymakers alike, who have been let down by a recent string of disappointing jobs reports.

Dan North, senior economist at Euler Hermes North America, explained that "Q3 GDP fell asleep at the wheel" but that there were indications that an economic rebound was in the works for August. North noted that the ongoing labor shortage would continue to pose problems that will cut into a wider rebound of economic activity for now, but says that other indicators pointed to a stronger fourth quarter.

"It is my hope that the pace of hiring will pick up, but it may be in vain since the gap between opening and hirings is at a record level," said North in an email to International Business Times. "Instead, what I have seen is an upturn in high frequency indicators such as credit card spending, TSA throughput, OpenTable reservations and hotel occupancy. All of those took a dip in Q3 when the Delta variant peaked, which the GDP report confirmed, and they are all turning positive again.”

Questions about how to deal with the imbalance in job openings and hirings have been acute as employers still struggle to find workers. The lack of qualified candidates to fill some roles due to concerns about the Delta variant left several sectors of the economy awash with unfilled vacancies. Several executives at the largest U.S. firms have gone so far as to say this is the most difficult period for hiring workers.

Other surveys found that half of workers said the pandemic has given them more control in deciding the direction of their career while another half said they were planning to leave their jobs in search of better compensation and benefits.

North warns that the continuing high quit rates at a time of a labor market imbalance could hinder the wider recovery.