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A strong rebound in job growth in October is raising hopes for a long-awaited recovery in the labor market. But millions of workers remain on the sidelines — and the economy needs them back.

The Labor Department reported Friday that U.S. employers added 531,000 jobs last month. Job gains for August and September were also revised upward. The unemployment rate fell to 4.6 percent from 4.8 percent in September.

"America is getting back to work," President Joe Biden told reporters at the White House. "Our economy is starting to work for more Americans."

Bars and restaurants added 119,000 workers in October as consumers felt more comfortable eating out. Factories and warehouses also saw significant job gains — a sign the fallout from the delta wave of coronavirus infections may be fading. 

Biden credited an aggressive effort to boost vaccination levels, including 

 that requires large employers to ensure all their workers are vaccinated by early January or get tested for COVID at least once a week. 

"That's good for our health, but it's also good for our economy," Biden said. "Now vaccinated workers are going back to work. Vaccinated shoppers are going back to stores. And with the 

ages 5-11 this week, we can make sure more vaccinated children can stay in school." 

Even with last month's solid job gains, the economy is still 4.2 million jobs short of where it was when the pandemic began. 

And questions about when or even if sidelined workers will return to the labor force continue to weigh on the U.S. recovery. 

There were more than 10 million unfilled job openings at the end of August. From factories to furniture stores, businesses are desperate for additional help.

Previous hopes about a jobs recovery have been dashed

Federal Reserve chairman Jerome Powell said this week that the waning impact of the delta variant should lead to stronger job growth in the months to come, though perhaps not as strong as the million-plus jobs that were added in July.  

Throughout the year, the U.S. has averaged between 550,000 and 600,000 jobs per month.  

"If we should get back on that path, then we would be making good progress," Powell said. "And we'd like to see that, of course."

Some analysts had expected to see a bigger return to the workforce once  schools reopened and pandemic unemployment benefits expired nationwide in September.

So far, that hasn't materialized. The labor force participation rate was unchanged in October.

That's left employers competing for scarce job applicants, driving up wages especially in traditionally low-paid industries like bars and restaurants.

Average wages in October were up 4.9% from a year ago, but for many workers that's not enough.

Nearly 3 million people who left the workforce during the pandemic have not yet returned. 

"They've been sitting out the pandemic," said Julia Pollak, chief economist at the job-search website ZipRecruiter. "As the health conditions improve, as wages rise, as more and more employers embrace flexibility, that flexibility will be extremely appealing to those workers." 

After Karen Schenck's bartending job in Tucson, Ariz., dried up in the summer of 2020, she moved in with her sister in California and found gig work as a part-time delivery driver. 

"It's a hustle," Schenck says. "It's not my favorite thing."

She welcomes the break from in-person customer contact, though. And she's reluctant to return to her old bartending job, even as her former employer is eager to rehire her. 

"It's so nice to not be yelled at by somebody just because I wasn't quick on the draw with a Budweiser," Schenck says. 

Business and Economic News

Scott Horsley

Author

U.S. employers added 531,000 new jobs as the unemployment rate fell to 4.6 percent. Millions of would-be workers are still on the sidelines, though, leaving the pace of the recovery in doubt.

The labor market is back on track after 531,000 jobs were added in October

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