The Job Market Is Solid

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In October 2020, US employers added 638,000 jobs to the market, and the unemployment rate dropped a full percentage point to 6.9%. Economists surveyed by Dow Jones were expecting a payroll gain of 530,000 and an unemployment rate of 7.7%.  

The increasing number of jobs and decreasing unemployment rates imply that economic recovery still is taking place. Although the increase was lower than the 672,000 jobs added in September and 1.5 million in August, the October gain was lower due to the loss of 150,000 temporary Census jobs.   

Outside of government, companies added 906,000 jobs. The highest growth was noted in health care, social assistance, retail, and leisure and hospitality. Job gains in September included 108,000 in health care and social assistance, 142,000 in retail, and 318,000 in leisure and hospitality. Job losses in government declined by 216,000 in September.  

The decline in the jobless rate included a labor force participation rate that increased 0.3 percentage points to 61.7%. A measure that included discouraged workers and those with part-time jobs for financial reasons decreased from 12.8% in August to 12.1% in September.    

The survey of households showed the total employment level increasing by 2.24 million and the employment-to-population ratio increasing by 0.8 percentage points to 57.4%. The survey also showed a decrease of 1.52 million in the total unemployed level and a decline of 541,000 in people not considered in the labor force.  

Individuals who reported they had lost their jobs because their employer lost business or closed during the pandemic decreased from 19.4 million in September to 15.1 million in October. 

The economy began rebounding in the July-September quarter as businesses began reopening after pandemic-related shutdowns. People began flying, staying in hotels, and going to restaurants and bars with expanded outside seating. Manufacturing is rebounding as consumers increase their purchases of cars, homes, and housing-related goods such as furniture and appliances. 

The October growth brings the total payroll gains since May to approximately 12 million. If the current pace of hiring continues, it would take less time to regain the jobs lost to the coronavirus pandemic than it did to recover the jobs lost during the 2008-2009 recession.