Key Takeaways:
- The October total exceeds average growth for the previous year
- Gains are led by Hospitality and Professional/Business Services
- Construction sees an uptick of 44,000 jobs, although most are in the non-residential sector
- Unemployment falls to 4.6%, a drop of 0.2%
By Manuel Gutierrez, Consulting Economist to NKBA
Following disappointing readings in August and September when employment growth was below expectations, total employment in October rose by 531,000. The number of jobs added for the month is higher than the monthly average of 494,000 for the past year. Along with relatively stronger growth in this latest report, the Bureau of Labor Statistics upwardly revised the jobs figures for the preceding two months.
Despite the welcome job growth, total employment of 148.3 million is still behind the levels prior to the pandemic by nearly four million jobs.
At October’s rate, it would take at least seven more months to reach the peak employment level of 152.5 million jobs seen in February of last year.
Virtually all economic sectors contributed to October’s growth. Hospitality and Professional & Business Services led all, with 143,000 jobs added. The Hospitality sector represent over one quarter of the month’s total job growth. Professional Services, which added 100,000 jobs, is nearly one-fifth of the total.
Figure 2 displays the contribution of these and other sectors to the month’s job growth.
Manufacturing, perhaps reacting to the supply chain issues concentrated mostly on imported goods, has the third highest number of new jobs in October. Industry employment increased by 60,000 for the month, the highest number of jobs added in any month since June of last year.
Closer to our industry, the Construction sector added 44,000 jobs in October. Overall growth has been inconsistent. This is the third time that employment in this sector increased over the last seven months. although it should be noted that such low growth in construction is caused mainly by nonresidential employment.
While total construction employment is has grown by 98,000 since the beginning of the year, nonresidential has grown only by just 7,000. Residential building has added 37,000 jobs and Specialty Tradesemployment has increased by 51,000.
Only one economic sector saw a job decline in October, Government, which was off by 73,000. State and local government reduced their employment rolls, by 25,000 and 45,000 respectively, while employment at the Federal level fell by just 3,000. The higher losses in state and local governments should not come as surprise, since they account for the bulk of total government employment. Local government represents nearly two-thirds of total government jobs (64%), with states contributing between a quarter and a fifth of government employment.
Wages in the private sector increased by 5.8%, the highest increase in over a year.
Other areas of employment also improved in October. The unemployment rate fell to 4.6%, down two-tenths of a percent. While the rate for men fell by half a percentage point to 4.5%, women saw their unemployment rate worsen by two-tenths to 4.7%.
Not surprisingly, monthly wages also rose in October as employers offered incentives to secure workers. Wages in the private sector increased by 5.8% overall, the highest increase in over a year. Wage gains for the major economic sectors are shown in Figure 3, but note that these data exclude fringe benefits and bonuses, especially signing bonuses which many employers are offering today.
Wages rose the fastest for Transportation & Warehouse jobs, which are critical in moving the supply chain, followed by Professional & Business services.
Wages are expecting to continue rising, at least for the near future.
Higher wages have not yet been a significant impetus to attract more workers. The labor participation rate stands at 61.6%, exactly the same it was a year ago at this time.
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