U.S. nonfarm payrolls increase more than forecast in October

The U.S. Labor Department announced on Friday that nonfarm payrolls rose by 638,000 in October after an upwardly revised 672,000 advance in the prior month (originally a gain of 661,000), reflecting he continued resumption of economic activity that had been curtailed due to the coronavirus pandemic and efforts to contain it. This, however, was the smallest employment gain since the U.S. job market started to recover in May.

According to the report, employment rose notably in leisure and hospitality (+271,000 jobs), professional and business services (+208,000), retail trade (+104,000), and construction (+84,000). Meanwhile, employment in government (-268,000) dropped.

The unemployment rate fell to 6.9 percent in October from 7.9 percent in September.

Economists had forecast the nonfarm payrolls to increase by 600,000 and the jobless rate to drop to 7.7 percent.

The labor force participation rate increased by 0.3 percentage point to 61.7 percent, while hourly earnings for private-sector workers edged up 0.1 percent m-o-m (or $0.04) to $29.50, following an unrevised 0.1 percent m-o-m advance in September. Economists had forecast the average hourly earnings to increase 0.2 percent m-o-m in October. Over the year, average hourly earnings increased by 4.5 percent in October, following a revised 4.6 percent rise in September (originally an increase of 4.7 percent).

The average workweek was unchanged at 34.8 hours in October, exceeding economists' forecast for 34.7 hours.