October jobless rate drops to 6.9%
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 the1.5 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 – strikingly – 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 even 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 2008-2009 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 economy, which had rebounded sharply in the July-September quarter as businesses reopened from virus-related shutdowns, is now expanding
more slowly. Many businesses, especially restaurants and bars that had made use of outdoor seating, may struggle as the weather turns colder.
Consumers could also pull back again on shopping, traveling and other activities to avoid contracting the virus.