The October job report is expected to show an increase in hiring

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WASHINGTON (AP) – After two disappointing months of hiring, a key question that towers over Friday’s October US jobs report will be whether companies have had more success filling millions of open positions this time around.

According to a survey by the data provider FactSet, economists predict that employers created around 400,000 jobs in the past month. That would be a stronger result than the average monthly increase of 280,000 in August and September, albeit well below the sharp increase of around 1 million jobs in June and July. The unemployment rate is expected to drop from 4.8% to 4.7%.

There are signs that the economy is recovering from a delta-induced slowdown, and that the labor market may be too. Consumer confidence rose in October after three months of decline. Service companies in areas such as retail, banking and warehousing saw a sharp jump in sales. And more Americans bought new homes last month.

However, some companies say they still cannot find enough workers to fill jobs. Many parents, especially mothers, have not returned to work after leaving jobs to care for children or other relatives during the pandemic. Contrary to some predictions, the phasing out of a $ 300-a-week federal unemployment benefit hasn’t resulted in more people looking for work.

Most economists, however, hope that with vaccinations that suppress the Delta Wave, more people will seek and find work because they are no longer sick or caring for someone who is sick, or because they are no longer afraid of becoming infected. These health problems had sidelined more people in September than in previous months.

America’s workers, who are more influential in the labor market than they have been in decades, are receiving solid wage increases. The higher income could entice more people to break away from the sidelines and look for work again. In the July-September quarter, wages and salaries rose year-on-year, the fastest they have been for 20 years. Most of this profit, however, went to people who were already gainfully employed and who left their jobs: the number of people who quit, mostly to fill new positions, has reached a record high.

However, rising inflation has undermined much of the value of these wage increases and has become the most serious headwind for the US economy. Millions of families are burdened with higher costs for food, heating oil, rents and furniture. Prices rose 4.4% in September from 12 months earlier, the largest increase of its kind in three decades.

That surge in inflation was a big reason the Federal Reserve announced this week that it would begin dismantling the stimulus it has given the economy since last year’s pandemic recession. The Fed will do this by reducing its monthly bond purchases, which are designed to keep long-term interest rates low in order to stimulate borrowing and spending.

Chairman Jerome Powell suggested that it will not be possible to get a clear picture of the health of the labor market until the effects of COVID-19 continue to wear off, which could take months.

However, there are now numerous signs that the economy is recovering: The number of initial jobless claims has fallen for the fifth week in a row and is almost as low as the number of jobless claims before the pandemic broke out 20 months ago.

And although hiring numbers have slowed for now, consumer demand remains healthy. After several rounds of economic checks and other government bailouts, Americans have amassed about $ 2.5 trillion more in total savings than they did before the pandemic. When this money is spent, it is likely to fuel further economic activity.

The Conference Board, a corporate research group, said its October consumer survey showed an increase in the proportion of Americans who said they bought cars, houses, or large appliances. And nearly half of those surveyed said they would be on vacation for the next six months – the highest percentage since February 2020, before COVID-19 hit the economy.

That suggests Americans are increasingly willing to spend more on personal services like air travel, movies, and concerts – activities they largely avoided during the height of COVID.

Copyright 2021 The Associated Press. All rights reserved.


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