U.S. Economy Added 638,000 Jobs in October, Unemployment Dropped to 6.9%

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The U.S. economy added 638,000 jobs in October and the unemployment rate fell to 6.9 percent, according to data released Friday.

Economists had forecast 575,000 jobs and a decline in the unemployment rate to 7.7 percent, two-tenths of a percent October’s 7.9 percent. The Labor Department had initially reported that the economy added 661,000 jobs in September.

Private-sector payrolls grew by 906,000 jobs in October, much more than expected and above October’s figure.  Government employment fell by 268,000, including a 138,000 loss in jobs at the federal government. The decline in federal government workers was driven by the loss of 147,000 temporary census workers. Local government education and state government education workers also decline, by 98,000 and 61,000 respectively.

The workforce participation rate jumped to 61.7 percent from 61.4 percent in the prior month. Average hourly earnings ticked up 0.1 percent and are now 4.5 percent above the year-ago level.

The economy has added around 12 million jobs in the past six months, a record-breaking pace. The increase in the ranks of employed workers shows that companies ramped up hiring as the economy reopened and consumers came back to stores, restaurants, and other businesses that had been shuttered in March and April. Despite the gains, total employment in August was lower than its February level, highlighting just how deep the pandemic cut into what had been the strongest jobs markets in decades.

Yet layoffs remain high, indicating that the pandemic’s effects are still ravaging the economy. A separate report on Thursday showed that 751,000 Americans applied for unemployment benefits in the prior week, the lowest since the pandemic struck but still higher than any week in post-World War 2 U.S. history prior to the pandemic.

 



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