U.S. job growth slows; millions still out of work

WASHINGTON • The U.S. economy created the fewest jobs in five months in October and more Americans are working part time, underscoring the challenges the next president faces to keep the recovery from the pandemic on track as fiscal stimulus dries up and new COVID-19 cases explode across the country.

The Labor Department's closely watched employment report on Friday also showed 3.6 million people out of work for more than six months. Democratic presidential candidate Joe Biden took the lead over President Donald Trump in the battleground states of Pennsylvania and Georgia for the first time on Friday, putting him on the verge of winning the White House.

“Initially, the recovery was breathtaking, but has lost much steam,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles. “With no fiscal stimulus and the resurgence of coronavirus, job gains will be tougher to achieve in the future.”

Nonfarm payrolls increased by 638,000 jobs last month after rising by 672,000 in September. That was the smallest gain since the jobs recovery started in May.

Employment was held back by the departure of 147,000 temporary workers hired for the 2020 Census. A 271,000 increase in leisure and hospitality jobs accounted for about two-fifths of the payrolls gain last month. Employment in professional and business services increased by 208,000, with about half in temporary help services. Manufacturing added 38,000 jobs, while construction payrolls increased 84,000.

The loss of temporary Census jobs and further layoffs at cash-strapped state and local governments cut overall government employment by 268,000 jobs. Economists polled by Reuters had forecast payrolls advancing by 600,000 jobs in October.

Though private payrolls increased 906,000 last month, the labour market recovery has a long way to go.

“Employment is still only at its late-2015 level,” said Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pa. “And at October's pace, it would take about 16 months for employment to return to its pre-pandemic level.”

More than US$3 trillion in government coronavirus relief for businesses and workers fuelled a historic 33.1 per cent annualized rate of economic growth in the third quarter.

Lack of fiscal stimulus and spiralling new coronavirus infections put the economy on a sharply slower growth path heading into the fourth quarter. Restaurants and gyms have moved outdoors, but cooler weather and the resurgence in COVID-19 infections could leave many in trouble.