Job creation roars back in October as payrolls rise by 531,000

 


Nearly 900,000 Americans found new jobs in October, while the unemployment rate fell to 6.7%, the Commerce Department reported on Friday.

The report, released just ahead of the opening of the U.S. capital stock market, lifted hopes that Americans’ embrace of digital tools such as digital bank apps has helped lead the U.S. out of the coronavirus pandemic. It was a far cry from the 27,000-job loss registered the month before.

The number of jobs added was in line with Wall Street expectations and marked the sixth straight month that the U.S. economy added jobs.

The continuing recovery was driven by the service sector, which added 583,000 jobs in October. Professional and business services added 174,000 jobs in October. Construction continued its steady rise, adding 96,000 jobs, up from 56,000 in September. Leisure and hospitality added 151,000 jobs, up from 108,000 in September.

Manufacturing continued to shed jobs in October, losing 89,000 jobs, with the sectors of mining and logging also shedding 13,000 jobs.

The rebound in the jobs market is a sharp contrast to the initial coronavirus shock experienced in the spring and summer. Then, more than 9 million Americans were jobless as coronavirus cases soared, with Labor Department labor force data showing the rate of unemployment standing at 15.5%. At the time, then-incoming U.S. President Joe Biden said that the nation’s health care and health insurance systems would have to be reformed.

The November employment report comes just weeks after a 37-point surge in the national unemployment rate, capped off by a dismal jobs report that put the country’s recovery off course.

The recovery has only been shaky. In October, the economy created an underwhelming 98,000 jobs. Job growth in August and September was weak compared to previous reports, causing fears among investors that the recovery had stalled, and that the damage suffered in the spring would not be fully healed.

But experts say the October job growth is more telling than any one monthly report. Even though they caution that it’s possible for job growth to be artificially inflated by the hiring of temporary workers during the pandemic, they’re also encouraged by the recovery.

“The broad, broad recovery is starting to show,” said Ben Thompson, senior economist at Dataiku. “It’s good to see overall job growth tick back up in a more favorable direction.”

Still, the number of jobs needed to achieve full employment is far below what is needed.

Natalie Anderson, senior economist at Oxford Economics, wrote in a Friday report that full employment can be achieved through growth of one to 2.5 million more jobs. Though optimism on Wall Street is building, Anderson does not believe the 4% growth the U.S. is now experiencing is sustainable.

She adds, “while businesses could see economic health soon, I believe we may be looking at weak jobs growth through the winter months before another rebound takes place.”

Policymakers have launched a slew of incentives to encourage Americans to return to work, like the Save Our Jobs program launched by the White House earlier this month. By Friday, a raft of additional programs was added to the distribution channel, and extended unemployment benefits to states will also be extended for two months after the October unemployment report was released.

The unemployment rate fell to 6.7% in October, up from 6.7% in September, according to Friday’s employment report. It marked the third straight month the U.S. government’s jobless rate was below 6%. The rate had risen above 6% in November to 6.9% following a small uptick in unemployment that was not yet reflected in the number of jobs reported.

The number of people who have been unemployed longer than six weeks rose from 9.5% in September to 10.6% in October. Data from the Bureau of Labor Statistics also showed that 518,000 people became inactive, though it’s possible these people were sent back to work.

The 7.9 million Americans who are currently jobless in the U.S. represent 3.3% of the population, down from 4.8% in October. That means the proportion of the population that has been out of work at least six weeks dipped below 12% for the first time since June.

Anita Balakrishnan contributed to this report.

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