The U.S. economy added 638,000 jobs in October, pointing to a slowdown in the labor market’s recovery from the coronavirus pandemic as government relief faded while new cases increased.
The Labor Department’s payroll report, released Friday, also showed the unemployment rate unexpectedly slid to 6.9% from 7.9%. Economists surveyed by Refinitiv expected the report to show that unemployment dropped to 7.7% and the economy added 600,000 jobs.
“That we added more jobs than expected and that the drop in the employment rate this time was not partly due to Americans leaving the labor force are two major pluses,” said Robert Frick, a corporate economist at the Navy Federal Credit Union.
Still, he said, “the pace of new hires is slowing, more workers are moving into the ranks of the long-term unemployed, and the number of permanently unemployed held steady at 3.7 million.”
U.S. employers made 672,000 new hires in September, leaving October as the fourth consecutive month that job growth has cooled since they added a combined 7.5 million workers in May and June. There are still about 10.1 million more Americans out of work than there were in February before the crisis began.
“It should be noted that the level of job creation is slowing, and taken together with initial jobless claims also bottoming out, suggests that the labor market’s recovery is starting to become more uneven,” said Sameer Samana, senior global market strategist at Wells Fargo Investment Institute. “Some of this may be due to the rise in COVID-19 cases and related containment measures.”
Markets reacted somewhat positively to the latest snapshot of the nation’s labor market, with stock futures paring their early-morning losses.
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Leisure and hospitality, one of the industries hit hardest by the pandemic, once again led in terms of job growth, with gains of 271,000. Food service and bars accounted for 192,000 of the total.
Professional and business services increased by 208,000 and retail added 103,700, with the biggest gains — 31,000 — in electronics and appliance stores. Construction jumped by 84,000
Education and health services added 57,000 new positions last month