The U.S. economy added 531,000 jobs in October.

October Jobs Report: U.S. Economy Added 531,000 Jobs  The New York Times

The American economy added 531,000 jobs in October, the Labor Department said Friday, a sharp rebound from the previous month and a sign that employers are feeling more optimistic as the latest coronavirus surge eases.

Economists polled by Bloomberg had been looking for a gain of 450,000 jobs. The unemployment rate declined to 4.6 percent, from 4.8 percent.

The October gain was an improvement from the 312,000 positions added in September — a number that was revised upward on Friday, along with the August figure, providing a more upbeat picture of the last few months.

The increase in employment was broad, with sizable gains at restaurants and bars, as well as in factories and offices. And in another sign that conditions are gradually returning to normal, the proportion of employed people who worked remotely at some point last month fell to 11.6 percent from 13.2 percent.

“This was a strong employment report that shows the resilience of the labor market recovery from the pandemic,” said Scott Anderson, chief economist at Bank of the West in San Francisco. “I think we will see a pretty strong bounce back in economic growth in the fourth quarter.”

Hiring has seesawed this year along with the pandemic, especially in vulnerable sectors like hospitality and retail, where workers must deal face to face with customers. White-collar employees have fared better, because many can work remotely.

Some employers are complaining of a shortage of workers, as many people remain on the sidelines of the job market. The labor force participation rate — the share of the working-age population employed or looking for a job — was flat in October, at 61.6 percent, and up slightly among those 25 to 54.

The stubbornly low participation rate underscores the damage the pandemic has done to the economy, and why it will take time to recover, despite strong months like October.

In theory, the demand for workers should be drawing more people into the labor force, but the participation rate is nearly two percentage points below where it was before the pandemic. Early retirements have been a factor.

A federal supplement to unemployment benefits expired in early September, and experts are watching whether the end of that assistance — and a depletion of savings accumulated from other emergency programs — increases the availability of workers.

So far, those effects have been muted, as health concerns and child care challenges have continued to affect many families. At the same time, the labor shortage has given workers a measure of leverage they’ve not experienced in recent years.

“For the last 25, maybe 30 years, labor has been on its back heels and losing its share of the economic pie,” said Mark Zandi, the chief economist at Moody’s Analytics. “But that dynamic is now shifting.”

Supply chain problems are another headache for employers. Automobile manufacturers have been particularly hurt by a shortage of semiconductors, while many companies are dealing with rising prices for raw materials and transportation.

The Commerce Department reported last week that the economy grew by 0.5 percent in the third quarter, compared with 1.6 percent in the second quarter. Economists attributed the slowdown to the resurgent pandemic and the supply chain holdups.

Still, there are reasons to be optimistic. The Federal Reserve said Wednesday that it would begin winding down the large-scale bond purchases that have been underway since the pandemic struck, signaling that it considers the economy healthy enough to be weaned from the extra stimulus.

The long-term unemployed as a share of total unemployment dropped to 31.6 percent from 34.5 percent. Leisure and hospitality employment picked up, after being challenged by the spread of the Delta variant, which dampened enthusiasm for in-person activities. And job gains in the manufacturing sector were roughly double what was expected.

The job picture also improved across most demographic groups. The unemployment rate for women, Hispanics, Asians and those without a college degree all ticked downward. Black unemployment, however, remained flat at 7.9 percent, nearly twice the rate for white workers.

That racial gap is likely to present a serious test of the Fed’s fresh emphasis on balancing its mandate to control inflation with the goal of “maximum inclusive employment,” as officials call it.

“It’s a euphemism, but something the Fed takes very seriously,” said Diane Swonk, chief economist at the accounting firm Grant Thornton. If the current surge in price increases does not abate by early next year, and both internal and external pressure to prioritize price stability takes precedence, then “patience may run out sooner than people think,” she said — and sooner than Jerome H. Powell, the Fed chair, would like.

Ben Casselman contributed reporting.

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