Job Market Bounced Back From Disappointment (08 November 2021)
Stellar jobs report
The U.S. Bureau of Labour Statistics (BLS) delivered an optimistic tone when it announced that 531,000 jobs were created for the month of October. Adding a cherry on top of the cake, the number of jobs for August and September have been revised upwards by 117,000 and 118,000 respectively. Overall, a total of 766,000 jobs have been added to the record. With this strong data release, the job market is now around 4.3 million jobs below the pre-pandemic level.
The main driver of the increase in jobs last month is the leisure and hospitality sector, which is not surprising as the number of COVID cases has been dropping since mid-September, leading to more activities such as dining-in at restaurants.
Labour supply remains stagnated
Unemployment rate continues to decline. At the moment, it is standing at 4.6%, 0.2% higher than the pre-pandemic level of 4.4%. Despite the fall in unemployment rate, the labour force remains stagnated in terms of growth. As the participation rate remained unchanged at 61.6%, this indicates that people are still not returning to the workforce.
Data in line with Fed’s timeline
With the start of quantitative easing (QE) tapering, the Federal Reserve is expecting QE to conclude during mid-2022. If the job market remains strong from now until mid-2022, it may recover to its pre-pandemic level, making progress towards the Fed’s maximum employment goal. In that case, the central bank may carry forward its projected timeline for interest rate hike.
The U.S. Bureau of Labour Statistics (BLS) delivered an optimistic tone when it announced that 531,000 jobs were created for the month of October. Adding a cherry on top of the cake, the number of jobs for August and September have been revised upwards by 117,000 and 118,000 respectively. Overall, a total of 766,000 jobs have been added to the record. With this strong data release, the job market is now around 4.3 million jobs below the pre-pandemic level.
The main driver of the increase in jobs last month is the leisure and hospitality sector, which is not surprising as the number of COVID cases has been dropping since mid-September, leading to more activities such as dining-in at restaurants.
Labour supply remains stagnated
Unemployment rate continues to decline. At the moment, it is standing at 4.6%, 0.2% higher than the pre-pandemic level of 4.4%. Despite the fall in unemployment rate, the labour force remains stagnated in terms of growth. As the participation rate remained unchanged at 61.6%, this indicates that people are still not returning to the workforce.
Data in line with Fed’s timeline
With the start of quantitative easing (QE) tapering, the Federal Reserve is expecting QE to conclude during mid-2022. If the job market remains strong from now until mid-2022, it may recover to its pre-pandemic level, making progress towards the Fed’s maximum employment goal. In that case, the central bank may carry forward its projected timeline for interest rate hike.
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