Labor secretary: We still have slack in the economy, despite impressive wage growth

Though the country is not at full employment yet, significant progress is being made in wage growth, worker participation and quality job creation, Labor Secretary Tom Perez told CNBC after the October jobs report was released Friday.

"These are all data points that are pointing us in the direction of an economy that continues to move in the right direction," Perez said on "Squawk on the Street."

The Labor Department announced Friday that the unemployment rate declined to 4.9 percent in October. Nonfarm payrolls fell short of expectations, totaling 161,000 versus the 175,000 jobs predicted.

The Bureau of Labor Statistics' report showed average hourly earnings rising 10 cents, a 2.8 percent annualized increase. The number could make a Fed rate hike in December more likely, in line with most of the market's expectations.

Perez had confidence about the jobs created last month, saying two-thirds were "in middle-class or above sectors."

"Professional business services continue to be one of the primary engines of growth. I think it's the second highest sector after education and health over the past year or two," Perez said.

Responding to critics of the Affordable Care Act, the labor secretary touted a significant statistic.

"Since the ACA passed, we've seen 15.5 million jobs created in the economy, so those job-killer predictions certainly fell flat," he said.

Perez said the next steps for economic growth are for the government to invest in infrastructure, raise the minimum wage and pass immigration reform.

"We know what needs to be done. We just need to muster the political will to do it," Perez said.