The U.S. economy added more than half a million new jobs last month, the Labor Department said Friday, a better-than-expected result that suggests hiring is starting to gain traction heading into the holiday season.
The Bureau for Labor Statistics said 531,000 new jobs were created last month, with headline unemployment rate falling to a post-pandemic low of 4.6%. The October tally was firmly ahead of the Street consensus forecast of 450,000 and the strongest in several months.
The BLS noted that hourly wages were up 0.4%, and 4.9% on the year, to $30.85 per hour, with the year-on-year reading coming in ahead of Street forecasts. The BLS also revised its September jobs addition estimate to 312,000 from its original estimate of 194,000.
Private sector job creation paced the gains, with 604,000 new additions -- well ahead of economists' forecasts of 400,000 -- which could explain the bump higher in year-on-year wage gains. Factory jobs additions were pegged at 60,000 while government jobs fell by a net 73,000.
"Payrolls surged in October with the trifecta of waning COVID concerns, back-to-school season, and declining unemployment benefits contributing to a strong uptick in hiring," said Peter Essele, head of portfolio management at Commonwealth Financial Network. "Notable increases came from goods-producing industries like construction and manufacturing, a sign that the recovery is permeating industries beyond the work-from-home segments of the economy."
"Transportation and trade also experienced strong gains, which could help supply-chain bottlenecks ahead of the holiday shopping season," he added. "All in all, the jobs numbers should be seen as a possible development, particularly as the economy continues to wean itself off fiscal and monetary stimulus."
U.S. stocks extended pre-market gains following the data release, with the Dow Jones Industrial Average rising points and the S&P 500 hitting a fresh all-time high of 4,704.22 points.
Tech stocks are also on the move, but with benchmark 10-year Treasury note yields easing to 1.526%, the Nasdaq Composite gained 75 points at the start of trading.
Earlier this week, Payroll processing group ADP said in its National Employment Report, which it compiles with Moody's Analytics, that private sector jobs grew by 571,000 in September, well ahead of the Street consensus forecast of a 400,000 total.
Still, there remains a record labor shortage in the world's biggest economy, with nearly 10.5 million positions left unfilled as of the end of August, near the highest since December 2000, the Labor Department said in its monthly Job Openings and Labor Turnover Survey, or JOLTS report, published last month.
Wages are also surging, with third quarter employment costs rising at the fastest pace in 39 years, according to the Labor Department's most-recent Employment Cost Index.