The U.S. economy added jobs for a sixth straight month in October and the unemployment rate fell more than expected but the labor market remains well below its pre-pandemic level as coronavirus cases surge.
The Labor Department reported Friday that nonfarm payrolls increased by 638,000 last month, down slightly from the September gain of 672,000. The unemployment rate dropped to 6.9% from 7.9% in September.
Economists had expected job growth of 530,000 and an unemployment rate of 7.7%.
The labor force participation rate rose 0.3 percentage points to 61.7% and those reporting that they had been out of work because their employer had lost business or closed during the pandemic dropped sharply to 15.1 million from 19.4 million in September.
“We saw unemployment drop more than expected on the back of an increase in the labor force and basically unchanged permanent layoffs. You can’t really complain about this report, aside from the fact there is still a long way to go,” Daniel Zhao, senior economist at Glassdoor, told CNN Business.
October’s growth brings the total payroll gains since May to around 12 million but that still leaves unfilled about 10 million positions lost in March and April during the initial economic impact of the pandemic.
“We’re only half dug out of our hole, and each month’s pace of jobs growth has been slower than the last since July,” Ernie Tedeschi, head of fiscal analysis at Evercore ISI, said in a tweet.
At the current pace of improvement, the job market would not return to its pre-pandemic level until February 2022, said labor economist Betsey Stevenson. In addition, CNN noted, “The advent of winter could be a tricky time for the jobs recovery, as cold weather could end outdoor activities that gained popularity during the pandemic, along the jobs that supported them.”
The biggest October job gains came in the leisure and hospitality sector, the hardest-hit during the pandemic, which jumped by 271,000. But the sector has only brought back just over half of the 8.3 million jobs lost in the spring.