–Private Jobs Surge 906,000, Led by Leisure, Business Services, and Retail
By Kevin Kastner
WASHINGTON (MaceNews) – The October employment report Friday showed that even an uptick in COVID-19 cases couldn’t stop the ongoing recovery, with a solid increase in payrolls and a further dip in the unemployment rate.
Nonfarm payrolls rose by 638,000 in October, ahead of the 600,000 gain expected and following small upward revisions to payrolls growth in the previous two months.
August jobs growth now stands at 1.492 million, while September payrolls rose by 672,000, preserving the trend of progressively smaller monthly increases seen over the last four months.
Private payrolls surged by 906,000 in October, much stronger than the 650,000 increase expected.
Government payrolls fell by 268,000 in October after a 220,000 decrease in the previous month. State and local education payrolls continued to decline due to virtual learning, while a drop in federal government jobs reflects the need for fewer Census workers.
Leisure and hospitality jobs rose by 271,000 after a 406,000 increase in September, while the retail sector added 103,700 jobs in October. Seasonal hiring for the holidays has begun, but this year there will be larger retail hiring at online services such as Amazon rather than brick and mortar stores.
In addition, professional and business services payrolls rose by 208,000, with temporary help services jobs up 108,700 after a falling by 80,000 in the previous month.
The service-providing sector added a total of 783,000 jobs in October after a 795,000 increase in September.
The goods-producing sector added jobs as well, with a 123,000 increase in October. Manufacturing jobs rose by 38,000 and construction added 84,000 jobs.
Average hourly earnings rose by 0.1% after a flat reading in September, but the year/year rate fell to 4.5% from 4.6% in September. The rate is still elevated compared to the 3% rate before the shutdowns.
In the household survey, the unemployment rate fell to 6.9% from 7.9% in September, a larger drop than expectations for a smaller decrease to 7.7%, but still sharply above pre-COVID levels.
The BLS again cited the issue of mislabeling temporarily furloughed workers as unemployed on temporary layoff rather than as simply absent from work. However, this month, they said the impact on the not seasonally adjusted figure would have been about 0.3 percentage point, and even that may an overestimation of the miss.
Before seasonal adjustment, the unemployment rate was reported at 6.6% after 7.7% in September, so the full 0.3 percent point adjustment would leave the October rate at 6.9% compared with 8.1% in September, when the miss was roughly 0.4 percentage point.
The labor force participation rate ticked up to 61.7% from 61.4% in September, as the number in the labor force increased only modestly, though with a more favorable mix. In October, the number of employed workers in the household survey rose by 2.243 million, while the number of unemployed fell by 1.519 million.
The wider U-6 rate, which represents those underemployed and those working part-time rather than full-time, fell to 12.1% from 12.8% in September.
The number working part-time for economic reasons rose by 383,000 to 6.683 million, suggesting that only a small part of the increase in household employment was due to unemployed workers settling for part-time work. Still, this measure is up sharply from year ago, when there were 4.397 million working part-time when they wanted to work full-time.
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Contact this reporter: kevin@macenews.com.
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