531,000 jobs added in U.S. October jobs report

The new U.S. jobs report was much better than expected, as employers added 531,000 jobs last month.

DALLAS - The new U.S. jobs report was much better than expected, as employers added 531,000 jobs last month.

That's far better than the 400,000 economists expected.

The unemployment rate dropped to 4.6%

Rising consumer confidence and the approaching holiday season are credited.

And a drop in COVID-19 cases may have encouraged some people to look for work again.

While the jobs report is welcomed news, there is concern over its impact on inflation.

The figures point to an economy that is steadily recovering from the pandemic recession, with healthy consumer spending prompting companies in nearly every industry to add workers.

Though the effects of COVID-19 are still causing severe supply shortages and heightening inflation, something economics are concerned about.

At the Dallas Regional Chamber on Friday, the conversation centered around jobs.

Texas Workforce Commissioner and Chairman Bryan Daniel spoke about impact of COVID-19 on the workforce and economic recovery.

"It's really hard right now for folks to see how they're going to fill some of their entry level jobs in the hospitality space," he said.

At a job fair in Dallas Thursday, candidates had more than 10,000 jobs to choose from.

The latest jobs report echoes that. American employers added 531,000 jobs in October, the most since July.

A Now Hiring sign is seen as the Bureau of Labor Statistics reports that nonfarm payrolls increased by 235,000 in February and the unemployment rate was 4.7 percent in the first full month of President Donald Trump's term on March 10, 2017 in Miami, ((Photo by Joe Raedle/Getty Images))

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Many employers are paying higher wages to attract and retain employees.

Friday's report from the Labor Department also showed the unemployment rate fell to 4.6% last month.

"If you're not working, $12 an hour in fast food looks better, and $20 looks better if you work in a better restaurant," Daniel said.

SMU economist Dr. Mike Davis said that while the October jobs report is encouraging, he's concerned about quick inflation that could last longer than policymakers expect.

"But there's still a whole lot of uncertainty remaining," Davis said. "I think we have pretty good evidence that the inflation we're seeing now isn't just transitory, isn't temporary."

It’s what economists call a "wage-price spiral."

Companies may pass along rising labor costs to their customers, kicking off a vicious cycle, with consumers having to pay even more for items like food, furniture, and other goods, all of which have been rising significantly.

Prices rose 4.4% in September compared with 12 months earlier, the sharpest jump in three decades.

"And that has a real impact on workers, even if their wages go up. If prices go up by as fast or faster than wages, they're not getting ahead," Davis said.

Davis added that the long run forecast for inflation is almost impossible because a lot of it depends upon what the Federal Reserve does over the next four or five months.