The labor market is back on track after 531,000 jobs were added in October

Nov 5, 2021
Originally published on November 9, 2021 1:56 pm

Updated November 5, 2021 at 11:46 AM ET

A strong rebound in job growth in October is raising hopes for a long-awaited recovery in the labor market. But millions of workers remain on the sidelines — and the economy needs them back.

The Labor Department reported Friday that U.S. employers added 531,000 jobs last month. Job gains for August and September were also revised upward. The unemployment rate fell to 4.6% from 4.8% in September.


"America is getting back to work," President Biden told reporters at the White House. "Our economy is starting to work for more Americans."

Bars and restaurants added 119,000 workers in October as consumers felt more comfortable eating out. Factories and warehouses also saw significant job gains — a sign the fallout from the delta wave of coronavirus infections may be fading.

Biden credited an aggressive effort to boost vaccination levels, including a new OSHA requirement that large employers ensure all their workers are vaccinated by early January or get them tested for COVID at least once a week.

"That's good for our health, but it's also good for our economy," Biden said. "Now vaccinated workers are going back to work. Vaccinated shoppers are going back to stores. And with the launch of the vaccine for kids ages 5-11 this week, we can make sure more vaccinated children can stay in school."

Even with last month's solid job gains, the economy is still 4.2 million jobs short of where it was when the pandemic began.


And questions about when or even if sidelined workers will return to the labor force continue to weigh on the U.S. recovery.

There were more than 10 million unfilled job openings at the end of August. From factories to furniture stores, businesses are desperate for additional help.

Previous hopes about a jobs recovery have been dashed

Federal Reserve chairman Jerome Powell said this week that the waning impact of the delta variant should lead to stronger job growth in the months to come, though perhaps not as strong as the million-plus jobs that were added in July.

Throughout the year, the U.S. has averaged between 550,000 and 600,000 jobs per month.

"If we should get back on that path, then we would be making good progress," Powell said. "And we'd like to see that, of course."

Federal Reserve Chairman Jerome Powell testifies before the House Oversight And Government Reform Committee hearing on Capitol Hill in Washington, D.C., in September. Powell has said the delta variant stalled a jobs recovery, and now policymakers are hoping workers will come back.
Al Drago / AFP via Getty Images

Some analysts had expected to see a bigger return to the workforce once schools reopened and pandemic unemployment benefits expired nationwide in September.

So far, that hasn't materialized. The labor force participation rate was unchanged in October.

That's left employers competing for scarce job applicants, driving up wages especially in traditionally low-paid industries like bars and restaurants.

Average wages in October were up 4.9% from a year ago, but for many workers that's not enough.

Nearly 3 million people who left the workforce during the pandemic have not yet returned.

"They've been sitting out the pandemic," said Julia Pollak, chief economist at the job-search website ZipRecruiter. "As the health conditions improve, as wages rise, as more and more employers embrace flexibility, that flexibility will be extremely appealing to those workers."

After Karen Schenck's bartending job in Tucson, Ariz., dried up in the summer of 2020, she moved in with her sister in California and found gig work as a part-time delivery driver.

"It's a hustle," Schenck says. "It's not my favorite thing."

She welcomes the break from in-person customer contact, though. And she's reluctant to return to her old bartending job, even as her former employer is eager to rehire her.

"It's so nice to not be yelled at by somebody just because I wasn't quick on the draw with a Budweiser," Schenck says.

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As COVID cases came down last month, more people went to work. Today we learned that U.S. employers added well over half a million jobs in October. That's the best showing in three months. If businesses are able to find workers, we could see even stronger job gains as we get closer to the holidays. NPR's Scott Horsley is with us.

Hey, Scott.


KELLY: All right. So this jobs report for October - it's a big improvement - right? - from August and September, when we were seeing this slump. Do we know why? What's going on?

HORLSEY: Well, coronavirus infections peaked in early September. And since that time, we've seen a significant improvement in the nation's health outlook. That certainly seems to be reflected in these stronger jobs numbers. Bars and restaurants have been particularly sensitive to the ups and downs of the pandemic economy, and they had an up month in October. They added 119,000 jobs. That's more than 20% of the total. President Biden, who has been having kind of a tough week politically, celebrated these good jobs numbers at the White House. He argues part of the reason for the improvement is the aggressive steps his administration has taken to boost vaccinations.


PRESIDENT JOE BIDEN: That's good for our health. But it's also good for our economy. Now, vaccinated workers are going back to work. Vaccinated shoppers are going back to stores. And with the launch of the vaccine for kids ages 5 through 11 this week, we can make sure more vaccinated children can stay in school.

HORLSEY: And that push for more vaccinations continues. Just this week, the administration rolled out its new OSHA rule that requires big employers to get all their workers vaccinated by early next year or else have them tested at least once a week.

KELLY: Do we know who is hiring, Scott? Which industries?

HORLSEY: Yeah. Besides bars and restaurants, factories added a healthy 60,000 jobs last month, and that includes almost 28,000 in auto factories and parts plants. You know, automakers have been hard-hit by the shortage of semiconductors, but maybe that's easing now just a little bit. We also saw lots of hiring in warehouses and in transportation. And also, jobs numbers for August and September were revised up. So that's good news, too.

KELLY: Yeah. Although there's some unevenness here. The unemployment rate ticked down, but not for everybody. What can you tell us about that?

HORLSEY: That's right. The overall unemployment rate fell to 4.6%, which is considerably better than a lot of forecasters thought it would be at this point. But the jobless rate for African Americans is still stubbornly high. It was unchanged last month at 7.9%. On the plus side, there was a substantial drop in unemployment among Latinos. That rate is still above the average, but it came down last month by about 4/10th of a percent.

KELLY: Now, from the department of shooting for the stars, remembering this summer, when we saw even stronger job growth than these October numbers. Can we get back to that? What would that take?

HORLSEY: You know, possibly. Employers would definitely like to hire more people, and right now, they're having to compete for a scarce pool of workers. You can see that in the wage rates, which were up in October almost 5% over a year ago on average. So far, though, even with those higher wages, we're not seeing a big jump in the number of people looking for work. Chief Economist Julia Pollak of ZipRecruiter notes that almost 3 million people who left the job market during the pandemic have not yet come back.

JULIA POLLAK: They've been sitting out the pandemic. But as the health conditions improve, as wages rise, as more and more employers embrace flexibility, that flexibility will be extremely appealing to those workers who are on the margins and who only come into the workforce when the conditions are right.

HORLSEY: So we could see more people coming off the sidelines and joining the workforce. That would be a good thing for the economy if it does happen. The U.S. has still recovered only about 80% of the jobs it lost during the pandemic.

KELLY: Thank you, Scott.

HORLSEY: You're welcome.

KELLY: NPR's Scott Horsley.

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