Jobs boom and wages jump in October, and suddenly things look pretty good

You know all those concerns we had in August and September of a slowdown in employment growth and the overall economy? I think you can put those concerns away for the next few weeks, after Friday's blowout US jobs report.

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.

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 revision in Friday’s report.

Those positive revisions to August and September means that we now have 766,000 more jobs in America than we thought we had on Thursday. And it was a widespread gain across almost all sectors.

Strong job gains across the board in October:

Restaurants +119,000
Biz +100,000 (41% were temp jobs)
Manufacturing +60,000
Warehouses +54,000
Construction +44,000
Healthcare +37,000 (inc. +16k in home health)
Retail +35,000
Dryclean +28,000
Hotels +23,000
Fin services +21,000

— Heather Long (@byHeatherLong) November 5, 2021

This also means that we have regained more than 18 million of the 22.4 million jobs lost as the pandemic broke out. We still have a ways to go to get back to our pre-COVID peak (which may be very hard to do because a lot more people are, you know, DEAD), but so far the jobs recovery in 2020 and 2021 hasn't been the slow grind that we've seen in the last 3 recessions.

THIS is the key chart to watch (from @calculatedrisk)

This recovery has been incredibly fast thanks to strong gov't aid and the vaccines.
18 million jobs already back (out of 22 million lost)

In 2021 alone, over 5.8 million jobs have come back. pic.twitter.com/gMwZmX7IL2

— Heather Long (@byHeatherLong) November 5, 2021

The decline in COVID cases in much of the country in October seems to have restarted hiring in many service areas, especially in bars and restaurants. Over 119,000 jobs were added in that area, and comes after 2 months of stagnation in August and September.

And it looks like employers are finally starting to understand that if you want to fill positions these days, you have to pay up. Look at the jump in wages in recent months.

Wages increased 0.4% for the month, in line with estimates, but rose 4.9% on a year-over-year basis, reflecting the inflationary pressures that have intensified through the year. The average work week edged lower by one-tenth of an hour to 34.7 hours.

That's especially the case in the lower end of the wage scale, as average hourly wages for workers that aren't supervisors are up 5.75% year-over-year, and leisure and hospitality wages have risen a stunning 11.2% since October 2020. You can call that "inflationary" if you want, but I'd call it a pretty good thing in the real world.

Add all the new jobs along with the extra funding of the roads and bridges bill (and the related materials that are involved in that work), and things all of a sudden look pretty good for the economy as we head toward 2022. Let's keep up the good news, shall we?