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October Surprise: New Jobs Report Shows Best Employment Numbers Since 1950

October Surprise: New Jobs Report Shows Best Employment Numbers Since 1950

The U.S. job market snapped back in October, with nonfarm payrolls rising more than expected while the unemployment rate fell to 4.6%, the Labor Department reported Friday. The unemployment rate drop came with the labor force participation rate holding steady at 61.6%, still 1.7 percentage points below its February 2020 level before the pandemic declaration. That represents just shy of 3 million fewer Americans considered part of the workforce and is reflective of ongoing concerns about staffing levels.

Nonfarm payrolls increased by 531,000 for the month, compared with the Dow Jones estimate of 450,000. The jobless rate had been expected to edge down to 4.7%. Private payrolls were even stronger, rising 604,000 as a loss of 73,000 government jobs pulled down the headline number. October’s gains represented a sharp pickup from September, which gained 312,000 jobs after the initial Bureau of Labor Statistics estimate of 194,000 saw a substantial upward trend in Friday’s report.

KEARNY, NEW JERSEY – OCTOBER 25: U.S. President Joe Biden gives a speech on his Bipartisan Infrastructure Deal and Build Back Better Agenda at the NJ Transit Meadowlands Maintenance Complex. (Photo by Michael M. Santiago/Getty Images)

Treasury Secretary Janet Yellen weighed in on the report with a Twitter thread Friday afternoon in which she said the administration’s aggressive fiscal policies that have pumped in more than $5 trillion to the economy helped stave off more dire consequences from the pandemic.

Even with the rebound, the Bureau of Labor Statistics survey of households in October showed job holders rising by 359,000, leaving the employment level about 4.7 million below its pre-pandemic level. A separate measure of unemployment that includes discouraged workers and those holding part-time jobs for economic reasons fell to 8.3% from 8.5%. That rate was 7% before the pandemic.

Since adding more than a million jobs in July, the labor market had slowed sharply through the rest of the summer, with sizeable letdowns in August and September as economists greatly overestimated growth in both months. But revisions showed that the numbers for those months weren’t quite as dismal. Along with the boost from September’s initial count, August’s final reading came up another 117,000 to 483,000.

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