Job gains likely accelerated as the unemployment rate improved to 4.7% – .

Job gains likely accelerated as the unemployment rate improved to 4.7% – .

U.S. employers likely increased their hiring pace in October after a sluggish September, with a drop in COVID-19 infections and a demand for workers amid widespread shortages helping to bolster activity in the labor market. job.
The Labor Department is expected to release its October employment report on Friday morning. Here are the key metrics expected from the report, compared to consensus estimates compiled by Bloomberg:

  • Evolution of the non-agricultural wage bill, October: +450,000 expected, +194,000 in September
  • Unemployment rate: 4.7% expected, 4.8% in September
  • Average hourly compensation, from one month to the next: 0.4% expected, 0.6% in September
  • Average hourly compensation, from one year to the next: 4.9% expected, 4.6% in September

Non-farm payrolls are expected to show the biggest single-month jump since July. Although the wage bill has grown monthly so far in 2021, the economy remains at more than 5 million jobs below its pre-pandemic levels after jobs fell between March and April 2020 And the civilian workforce was still down by around 3.1 million. individuals compared to February 2020 to September.

Hiring is expected to pick up across a wide range of industries in October, but employers in the leisure and hospitality sector could see a particularly steep increase as concerns about the Delta variant have subsided and have allowed more employees to hire more employees. service to resume work. Leisure and hospitality jobs averaged nearly 350,000 payroll gains per month between February and July, although that growth fell to just 56,000 between August and September in the latest wave of infections.

However, job growth in all areas has not kept pace with employer demand. Job vacancies hit a record high in August – the last month for which data is available – while the quit rate hit a record high. And companies have widely cited labor shortages in third quarter earnings reports. Mentions of “work” on income calls are up 320% from a year ago, according to data from Bank of America.

“My biggest concern right now – aside from inflationary pressures – is ultimately what’s going on with this labor shortage, as the labor shortage is fueling the supply chain issues. supply that we’re seeing, ”said Kevin Mahn, chief investment officer for Hennion & Walsh. Yahoo Finance Live Thursday. “Everyone is planning a record-breaking holiday shopping season, but there will be delays in shipping. I am not concerned about consumer demand for products. “

Other economists have expressed similar concerns about labor shortages.

“Overall, we expect a substantial rebound in the pace of non-farm hires in October, with a gradual improvement in the unemployment rate and sustained earnings growth,” wrote Sam Bullard, chief economist at Wells Fargo, in a brief. note. “Although positive, job growth remains limited by supply, and there is little evidence to suggest that material improvement is near. “

“Indeed, the recent strikes and the vaccination warrants have been difficult factors on the supply front and suggest that the improvement in the labor market will be gradual in the months to come,” he added.

Still, labor data ahead of Friday’s report was bullish. ADP reported Wednesday that the private payroll jumped 571,000 better than expected in October, when only 400,000 were expected. New weekly jobless claims stood at 269,000, their lowest level since March 2020, and had also fallen below the psychologically significant level of 300,000 by mid-October during the survey week of the Ministry of Labor for the monthly employment report.

Labor market data is also important in informing the Federal Reserve’s monetary policy decisions. The central bank has indicated that it is looking for more progress in bringing sidelined workers back into the labor market before adjusting the rate on its phase-down program or considering raising interest rates.

“There is still some way to go to achieve maximum employment both in terms of employment and participation,” Federal Reserve Chairman Jerome Powell said on Wednesday in his latest post press conference. -FOMC. He added that it was “in the realm of the possible” for the economy to reach peak employment by the second half of next year, as measured by a wide range of metrics.

This post will be updated with the results of the Ministry of Labor’s October Jobs Report on Friday at 8:30 a.m. ET. Check back for updates.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter

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