US Economy Adds 531,000 Jobs in October: Experts React to Booming Payroll Growth

By Benzinga
November 6, 2021 Updated: November 6, 2021

The SPDR S&P 500 ETF Trust traded slightly higher Friday morning after the Labor Department reported a strong rebound in the U.S. jobs market in October.

The United States added 531,000 jobs in October, exceeding consensus economist estimates of 450,000 jobs. The U.S. unemployment rate fell to 4.6 percent from 4.8 percent, beating economist estimates of 4.7 percent.

Wage growth continued to accelerate to 4.9 percent, up from 4.6 percent in September.

The Labor Department also revised August’s total job growth higher by 117,000 jobs to 483,000 and September’s job growth higher from 194,000 to 312,000. The combined revisions totaled 235,000 additional jobs.

The leisure and hospitality industry led the job creation in October, adding 164,000 positions. Professional and business services added an additional 100,000 jobs.

Perfect Economic Storm

Jay Pestrichelli, CEO of ZEGA Financial, said easing COVID-19 restrictions and declining case numbers triggered a hiring rebound in October.

“Friday’s jobs report isn’t likely to mean much for the stock market, as the jobs report is a lagging economic data point, and the stock market currently is focused on corporate earnings and a continued reopening of the economy,” Pestrichelli said.

Chris Zaccarelli, Chief Investment Officer for Independent Advisor Alliance, said the jobs report is further evidence the economy and the jobs market are moving in the right direction.

“Many people believe—and we would agree—that the Fed would be happy to let the economy run hot, in terms of higher-than-average GDP growth and lower than average unemployment rates, as long as inflation doesn’t become entrenched,” Zaccarelli said.

Cliff Hodge, Chief Investment Officer for Cornerstone Wealth, said the only troubling thing about Friday’s report was that the labor force participation rate did not change from September’s level.

“What’s keeping so many people from coming back into the labor force now we’re seeing trends in COVID cases falling, and the advances of treatments and therapeutics? It’s a bit of a mystery,” Hodge said.

Green Light for Investors

Peter Essele, Head of Portfolio Management for Commonwealth Financial Network, said Friday’s report was a green light for investors.

“The release is affirmation that the economy is on the right footing and there exists a possibility that the Santa Claus rally could be one of the strongest in recent memory,” Essele said.

RSM economist Joe Brusuelas said demand for workers remains robust, and the U.S. economy is still short of full employment.

“The slow return of workers back into the labor force should tend to reinforce the idea over at the central bank that the economy should be approaching full employment by the second half of next year as conditions coalesce for a potential kickoff to the inevitable post pandemic policy normalization by the Federal Reserve in late 2022 or early 2023,” Brusuelas said.

By Wayne Duggan

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