Unemployment drops to 6.9% as 638K jobs added
WASHINGTON — The U.S. job market showed a surprising burst of strength in October, with employers adding 638,000 jobs and the unemployment rate tumbling to 6.9%. Still, the pace of hiring isn’t robust enough to rapidly soak up the millions of Americans who were thrown out of work by the pandemic recession.
The job gains suggested that a tentative recovery is still intact even as it faces a surging viral outbreak with no further financial aid from Congress.
October’s increase was slightly below the 672,000 jobs that were added in September and far fewer than the 1.5 million in August.
But last month’s gain was stronger than it appears: It was held down by the loss of about 150,000 temporary Census jobs.
Not only did the federal government lose jobs in October, so did struggling states and municipalities. Excluding governments at all levels, private businesses added a healthy 906,000 jobs. Hiring was particularly strong in construction, retail and a category that includes restaurants and hotels.
These businesses have been disproportionately damaged since spring by Americans’ inability or reluctance to dine out for fear of contracting the virus. The question, though, is whether they can keep hiring in the coming months as confirmed viral cases accelerate, colder weather arrives and some states or localities reimpose restrictions.
The report Friday from the Labor Department said the unemployment rate sank a full percentage point from 7.9% in September.
Yet the nation still has 10.1 million fewer jobs than it did before the pandemic intensified in March.
At the current pace of hiring, it would take until February 2022 to regain the jobs lost to the pandemic. That would be faster than the 2008-09 Great Recession, when it took more than five years to recover the jobs lost.
And the longer that unemployment remains elevated, economists worry, the harder it will be for many of those out of work to find jobs. Employers are often reluctant to hire people who have been unemployed for months.
“It was a pleasant surprise to see that the pace of the recovery hasn’t slowed down,” said Nick Bunker, an economist at Indeed, the job search website. “But we all need to keep in mind the huge hole that we’re in, in terms of jobs and unemployment.”
The gradual recovery of the job market has affected Americans in uneven ways and likely widened inequalities. Some categories of Americans — low-income employees, working mothers, people of color — have been deeply hurt by job losses. Many of them were employed by restaurants, hotels and other sectors that remain most damaged.
By contrast, higher-income and college-educated workers have been disproportionately able to work from home. Many of them have also benefited from a surge in home equity and from the Federal Reserve’s ultra-low-rate policies, which have fueled gains in the stock market.