US employment report beats expectations with 531,000 jobs added to economy in October

The US economy showed signs of getting back on track after 531,000 jobs were added in October and beat expectations in a rare piece of good news for an embattled President Joe Biden.

The Labor Department revealed nonfarm payrolls increased by 513,000 and the unemployment rate fell to 4.6 percent after struggles during the summer.

The increase was led by 164,000 new jobs in the leisure and hospitality industries, with Americans traveling again in large numbers and returning to hotels and restaurants.  

‘Over 5.6 million jobs created. Under 5% unemployment,’ said Biden on Twitter.

‘This is a significant improvement from when I took office, and a sign that we are on the right track.’ 

The numbers beat out economists’ projections. The consensus was that jobs would only grow by 420,000 as the US continued to try to rebound from the Delta surge over the summer.

It was welcome news for the White House after Democrats were rolled over by Republicans in the Tuesday elections and after reports fell below expectations over the summer.

Even so, conservatives said the numbers should have been better.

‘Job growth remains disappointing, and the reason is clear: The Democrats’ ‘War on small business is fueling inflation, causing major supply chain disruptions, and exacerbating a record national labor shortage,’ said Alfredo Ortiz, president of the Job Creators Network.

Retailers and Republicans fear new vaccine rules set to be enforced on January 4 could compound labor shortages and put pressure on businesses over the holiday season. 

October’s numbers were bigger than expected, suggesting the slowdown caused by the Delta variant of COVID-19 was not as bad as feared by economists

Biden said the figures showed the nation was on the right track when it came to bouncing back

Biden is due to address the numbers in an address later on Friday morning.

He is expected to link the good news to the impact of his $1.9 trillion pandemic relief.

The White House said it was the ‘fastest economic recovery in US history.’   

It comes after a torrid two weeks for the president. His massive domestic agenda – a $1.7 trillion social spending plan and an infrastructure package – remain stalled in Congress after missing multiple deadlines.

And this week, Democrats lost the governor race in Virginia – where the results will be seen as a bellwether for next year’s midterms – and clung on only narrowly in New Jersey.

That may suggest a disconnect between jobs progress and voters, when the national debate is focused on supply chain woes, inflation and gas prices. 

The latest polls have Biden under water with voters.

A rolling average of surveys, maintained by the data site FiveThirtyEight, has an approval rate of 43 percent for Biden compared with 50.4 percent of respondents who disapproved of his performance. 

October’s numbers come after two sluggish months of numbers. But the latest report revised August and September’s figures, adding an extra 795,000 jobs during those two months. 

Overall, the unemployment rate fell to 4.6% from 4.8% in September. While companies desperately want to hire, millions remain unemployed and outside the labor force.

This labor market disconnect has been blamed on caregiving needs during the pandemic, fears of contracting the coronavirus, early retirements, massive savings and career changes as well as an aging population and the recently ended expanded unemployment benefits. 

With many people who moved out of cities during the pandemic yet to return, there could also be a mismatch between the open jobs and location.

Nancy Pelosi returned to Capitol Hill on Friday morning to work the phones and try and get the Democrats’ spending bills passed today

There were 10.4 million unfilled jobs as of the end of August. About five million people have left the labor force since the pandemic started.

Federal Reserve Chair Jerome Powell told reporters on Wednesday that ‘these impediments to labor supply should diminish with further progress on containing the virus, supporting gains in employment and economic activity.’

The Fed announced it would this month start scaling back the amount of money it is pumping into the economy through monthly bond purchases.

There are concerns that the White House’s vaccine mandate, which comes into effect on Jan. 4 and applies to federal government contractors and businesses with 100 or more employees, could compound the worker shortages.

There has also been a rise in strikes as workers take advantage of the tight labor market to demand more pay and better conditions. The walk out by about 10,000 Deere & Co workers had no impact on October’s payrolls as it started in the middle of the period during which the government surveyed households and businesses for the employment report.

The scramble for workers continued to boost wage growth, which together with record savings should help to underpin consumer spending over the holiday session, though salaries are lagging inflation and shortages of goods are abound.