The U..S. economy recorded an increase of 531,000 jobs in October, and unemployment fell by 0.2% as the labor market recovers from the summer lows, according to the U.S. Bureau of Labor Statistics (BLS).
The number of unemployed people fell to 7.4 million, down from 7.7 million in September, according to the BLS report released Friday. Economists surveyed by Dow Jones projected 450,000 jobs would be added in October.
While unemployment claims continue to fall, the country still struggles with labor shortages, supply chain issues and growing inflation. Job growth was widespread throughout the economy in October, with leisure and hospitality adding 164,000 jobs, professional and business adding 100,000 and manufacturing adding 60,000 jobs, according to the BLS report.
“We think a big constraint or headwind causing some of the slowdown we’ve seen in recent months was Covid-related, and now it seems the cases and hospitalizations are trending in the right direction,” Bank of America U.S. economist Alex Lin told CNBC.
Private payrolls were also stronger, increasing 604,000, according to CNBC. Government jobs dipped by 73,000 dragging the overall jobs figure down.
The labor participation rate remained at 61.6% in October, highlighting a tight labor market, BLS reported. Average hourly earnings grew 4.9% as employers pay workers more in order to keep their employees in a tough jobs market.
Job growth slowed in August and September, with many reported the cause as delta variant cases surging and workers staying out of the labor market.
“People are having to change industries, change careers, so that slows down that pace of recovery,” Sarah House, senior economist at Wells Fargo, told The Wall Street Journal.
Meanwhile, the Federal Reserve announced Wednesday that it continues to see inflation as transitory, and it will begin reducing its bond purchasing in November to combat the growing prices. The Federal Reserve also voted against raising interest rates that remain around a near-zero figure.
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