US Employment Shows 'Green Light'... 530,000 Jobs Added in October

No Change in Economic Activity Participation Rate Despite Employment Growth
Dow and S&P 500 Rise... Nasdaq Declines

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] The U.S. employment market in October made a surprising rebound as it moved away from the risks posed by the Delta variant of COVID-19.

The U.S. Department of Labor announced on the 5th (local time) that nonfarm payrolls increased by 531,000 in October. This significantly exceeded the market expectation of a 450,000 increase compiled by Dow Jones.

The job gains for August and September were also revised upward. August job gains were initially reported as 366,000 but were revised to 483,000, and September job gains increased from 194,000 to 312,000.

The October job growth is even more positive as it was led by the private sector rather than the public sector. Public sector jobs decreased by 73,000 in October, but private sector jobs increased by as many as 604,000.

Employees were hired across various industries including leisure and hospitality, professional and business services, manufacturing, transportation and warehousing, and construction.

The unemployment rate fell by 0.2 percentage points from 4.8% in the previous month to 4.6%.

While the employment report was evaluated as showing that the employment recovery has returned to a normal trajectory, concerns remain.

Despite the expansion in employment, the labor force participation rate, which indicates the ratio of employed and job-seeking individuals among the working-age population, remained unchanged at 61.6% from the previous month. It is assessed that the increase in early retirements due to rising home prices and stock prices is slowing the employment recovery.

The employment recovery is a factor that can influence the Federal Reserve’s decision to raise the benchmark interest rate. Jerome Powell, Chair of the Federal Reserve, expressed the view a day earlier that full employment must be achieved for a rate hike while announcing a tapering of asset purchases.

Professor Son Seong-won of Loyola Marymount University explained, "Wage increases, the resumption of school classes, and the end of expanded unemployment benefits supported job growth, but the labor force participation rate remained unchanged and the pace of job growth is slow. This indicates that it will take time for the Fed to gradually end quantitative easing and raise interest rates."

Supported by strong employment indicators, major indices on the New York Stock Exchange showed mixed trends on the day. As of 1:30 p.m., the Dow Jones Industrial Average rose 0.38%, the S&P 500 increased 0.23%, but the Nasdaq gave up gains and was down 0.04%.

This content was produced with the assistance of AI translation services.