WASHINGTON — U.S. employers added 165,000 jobs in October and unemployment edged down to 4.1%, the Bureau of Labor Statistics reported Friday, delivering a stronger hiring picture even as some workers struggled to secure full-time employment.
The gain exceeded the 65,000 increase forecast by economists surveyed by Reuters. September’s payroll increase was revised to 60,000 from 29,000, while August’s rose to 186,000 from 133,000, according to BLS. Together, the revisions added 84,000 jobs.
Professional and business services added 70,000 jobs, health care gained 42,000 and transportation and warehousing added 25,000, BLS said. Manufacturing employment rose by 19,000. Financial activities showed little change.
Average hourly earnings increased 14 cents, or 0.4%, to $38, putting annual wage growth at 3.1%, the agency said.
Unemployment declined from September’s 4.2%. BLS characterized the monthly change as small.
“The October jobs report delivered a positive surprise, adding more jobs than expected as prior months were revised upward. Wage gains were solid but are still struggling to keep up with inflation,” Curt Long, chief economist with America’s Credit Unions, said in a statement. “The conditions are ripe for a rate hike from the Federal Reserve next month, which will be good news to savers but will add to affordability strains for borrowers. All borrowers benefit from the low-rate loans offered by credit unions and their competitive impact in the financial services marketplace.”
Increase in Part-Time Jobs
But the number working part time for economic reasons rose by 339,000 to 4.8 million, BLS reported. Those workers wanted full-time jobs but faced reduced hours or could not find full-time positions.
The Associated Press reported that October’s monthly wage increase was the largest since January, although annual pay growth trailed inflation for a seventh consecutive month. AP described a labor market in which employers are retaining workers but remaining cautious about expanding payrolls, creating difficulties for new entrants and people seeking another job.
Reuters reported that the stronger hiring figures could give the Federal Reserve greater room to address inflation. The central bank left its benchmark rate at 3.75% to 4% last week, and economists expect an increase in December, according to Reuters. October consumer inflation figures, due Tuesday, will provide another reading before policymakers meet.
‘Affordability Crisis in One Stat’
In market reaction compiled by Reuters, Treasury yields and the dollar rose after the release, while traders increased their bets on a December rate increase.
Brian Jacobsen, chief economic strategist at Annex Wealth Management, told Reuters that stronger hiring and upward revisions reinforced the Fed’s assessment of economic strength. But he said wage gains below inflation continued to squeeze purchasing power.
“That’s the affordability crisis in one stat,” Jacobsen told Reuters.
