The United States economy showed continued signs of recovery in October, as the Labor Department’s jobs report revealed that 638,000 jobs were added last month and unemployment fell below 7%.
The Labor Department's payroll report released Friday showed the unemployment rate unexpectedly slid to 6.9% from 7.9%. Economists surveyed by Refinitiv expected the report to show that unemployment dropped to 7.7% and the economy added 600,000 jobs.
October marked the fourth consecutive month that job growth cooled since employers added a combined 7.5 million jobs in May and June. U.S. employers made 672,000 new hires in September. There are still about 10.1 million more Americans out of work than there were in February before the crisis began.
Among the big contributors to the October increase were two industries hit hard by the pandemic: food and drink establishments, which added 192,000 jobs, and retailing, which picked up 104,000. But cooler temperatures and caution about shopping amid surging coronavirus cases threaten those gains.
"It should be noted that the level of job creation is slowing, and taken together with initial jobless claims also bottoming out, suggests that the labor market’s recovery is starting to become more uneven," Sameer Samana, senior global market strategist at Wells Fargo Investment Institute, told FOX Business. "Some of this may be due to the rise in COVID-19 cases and related containment measures."
Even as the unemployment rate has come down, joblessness for many has become more prolonged. The Labor Department said the number of long-term unemployed — those without work for 27 weeks or more — grew to 3.6 million in October, an increase of 1.2 million.
Further recovery efforts could rest on how the election eventually plays out. If Republicans maintain control of the Senate, it’s unlikely that an additional multitrillion-dollar relief package will pass, as was expected with Democrats in control of Congress and the White House.
Carl Tannenbaum, chief economist at Northern Trust in Chicago, told the New York Times that this will cut his estimate of growth next year by a full percentage point.
“The good news is that the U.S. job market is healing,” he said. “But full recuperation may take awhile.”
About the Author
Brett Christie is the managing editor of Workspan Daily.