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U.S. Jobs: Employment Pendulum Swings Positive in October

After the September jobs report, I found myself wondering whether the recovery had come and gone. October’s numbers say otherwise, with robust jobs growth in almost every sector.

After a stormy September. the U.S. employment picture is considerably less cloudy.Whew! I have to say this month’s jobs report from the U.S. Bureau of Labor Statistics comes as something of a relief. After last month’s initial number dropped below 200,000 (revised upward this month, BTW), October’s 531,000 jobs added comes as a welcome relief. It also doesn’t hurt that the unemployment rate dropped by 0.2 percent (from 4.8 to 4.6 percent).

 

The August numbers jumped by +117,000 to 483,000 jobs added, and September jumped +118,000 to 312,000 jobs added. That brings the current trailing monthly average up to a much more respectable 442,000. It’s not on par with the 1 million monthly figures recorded  earlier in the year, but it’s not bad, either.

 

Where Did Those Jobs Get Added?

 

To bolster the theory that the Delta surge is waning, the report cites “notable job gains” in leisure and hospitality, where face-to-face interaction is essential. Other big winners included professional and business services, manufacturing, and transportation and warehousing. Public education was the only job loser in October.

 

Here’s a summary of some more details:

 

Leisure and hospitality grew by 164,000 in October, with 119,000 in food services and drinking places, and 23,000 in accommodation. This sector still remains down by 1.4 million (8.2 percent) since February 2020, but has added 2.4 million jobs back since its lowest point.

 

Professional and business services added 100,000 jobs in October, with 41,000 in temporary help services. Other areas (management and technical consulting, other professional and technical services, scientific research and development, and legal services) all posted more modest gains in a range from 5,000 to 14,000 each. This sector is down by 215,000 jobs since its lowest point.

 

Manufacturing grew by 60,000 jobs, with 28,000 of that for motor vehicles and parts. Other areas (fabricated metal products, chemicals, and printing and related support) posted more modest gains in a range from 4,000 to 6,000. This sector is down by 270,000 jobs since February 2020.

 

After a stormy September. the U.S. employment picture is considerably less cloudy.Transportation and warehousing added 54,000 jobs, with gains in warehousing and storage (+20,000), transit and ground passenger transport (+16,000), air transport (+9,000) and truck transport (+8,000). This is the only up sector since February 2020, having added 149,000 jobs since February 2020.

 

Construction added 44,000 jobs in October, with growth for specialty trade contractors (+19,000), and heavy and civil engineering construction (+12,000). Construction job levels are 150,000 down from February 2020 numbers.

 

Healthcare added 37,000 jobs in October, with the bulk in home healthcare (+16,000) and nursing care facilities (+12,000). This sector is down by 460,000 jobs from February 2020 levels.

 

Retail trade grew by 35,000 jobs in October, with beverage stores adding 16,000, general merchandise stores 15,000, health and personal care stores 8,000, and electronics and appliance stores 6,000. These gains were offset by a 10,000 job loss in building material and garden supply stores. The sector is down by 140,000 jobs vis-à-vis February 2020.

 

Other services added 33,000 jobs in October, with personal and laundry services accounting for most of that gain at +28,000. Employment in this sector is 169,000 below its February 2020 level.

 

Financial services grew by 21,000 jobs in October, with roughly half in real estate and rental and leasing (+12,000) and securities, commodity contracts and investments (+11,000). Employment is now even with the February 2020 level in this sector.

 

Wholesale trade added 14,000 jobs in October, mostly in durable goods. Employment in this sector is 158,000 lower than February 2020 levels.

 

Mining added 5,000 jobs continuing a slow but steady growth trend. That said, mining remains 87,000 below its peak level in January 2019.

 

After a stormy September. the U.S. employment picture is considerably less cloudy.Education is the only sector that saw big losses. Local government education lost 43,000 jobs, and state government education 22,000 jobs, while private education added 17,000 jobs. As compared to February 2020, local government education is down by 370,000, state government education by 205,000, and private education by 148,000.

 

This is the broadest, most widespread growth distribution I’ve seen this year. Education aside, most other sectors experienced something between modest and moderate growth. Even our home sector of Information added 10,000 jobs, which the U.S. BLS characterizes as “changed little.” Overall, the information  sector is down by 122,000 jobs since February 2020.

 

What About Wages (and Inflation)?

 

Average hourly earnings were up by $0.11 to $30.96. Over the past 12-month period, earnings have grown by 4.9 percent on average. That said, the U.S. inflation calculator shows cumulative 2021 inflation at 5.4 percent, a worrisome number that’s been 5 percent or higher since last May.

 

Now that the recovery appears to still be moving ahead, inflation is likely to garner increasing attention as we transition into 2022. All in all, I’m vastly encouraged by this latest report (and the upward corrections to the two preceding months). I’m inclined to say that September was more of a blip than any kind of new normal.

 

Here’s hoping that my reading of these tea leaves is not overly optimistic.

 

ABOUT THE AUTHOR

Ed TittelEd Tittel is a 30-plus-year computer industry veteran who's worked as a software developer, technical marketer, consultant, author, and researcher. Author of many books and articles, Ed also writes on certification topics for Business News Daily, and on Windows desktop OS topics for TechTarget and Win10.Guru. Check out his website at www.edtittel.com.