The US labour market rebounded last month with a larger-than-forecast payrolls gain, indicating greater progress in filling millions of vacancies as the effects of the Covid-19 Delta variant fade.
Non-farm payrolls increased 531,000 last month after an upwardly revised 312,000 gain in September, a US Labour Department report showed on Friday. The unemployment rate fell to 4.6 per cent while the labour force participation rate was unchanged.
"Our economy is on the move," said President Joe Biden on Thursday in response to the release of the report.
The faster pace of hiring shows that more Americans returned to the workplace as Covid-19 cases declined and employers offered higher wages.
The report joined rising consumer confidence and services sector activity in painting a more favourable picture of the economy, after the Delta variant and economywide shortages of goods restrained growth in the third quarter to its slowest pace in more than a year.
Despite the drop in unemployment, millions remain unemployed and outside the labour force even though companies desperately want to hire.
This labour market disconnect has been blamed on caregiving needs during the pandemic, fears of contracting the coronavirus, early retirements, savings and career changes as well as an ageing population and the recently ended expanded unemployment benefits.
With many people who moved out of cities during the pandemic yet to return, there could also be a mismatch between open jobs and location.
There were 10.4 million unfilled jobs as of the end of August. About five million people have left the labour force since the pandemic started.
US Federal Reserve Chairman Jerome Powell told reporters on Wednesday that “these impediments to labour supply should diminish with further progress on containing the virus, supporting gains in employment and economic activity".
The Fed announced it would this month start scaling back the amount of money it is pumping into the economy through monthly bond purchases.
In his remarks on the report, Mr Biden doubled down on the need for Americans to be vaccinated, saying vaccination efforts have contributed to the improved economy.
"In recent months, we've started implementing vaccination requirements, which have helped bring the number of unvaccinated adults down in this country from around 100 million several months ago to 60 million now," he said.
The White House vaccine mandate comes into effect on January 4 and applies to federal government contractors and businesses with 100 or more employees. There are concerns that this could compound the worker shortages.
There has also been a rise in strikes as workers take advantage of the tight labour market to demand more pay and better conditions.
The walkout by about 10,000 Deere & Co workers had no impact on October's payrolls as it started in the middle of the period during which the government surveyed households and businesses for the employment report.
Agencies contributed to this report