US Unemployment Rate Slides to 6.9% as October Job Growth Surpasses Expectations
October employment levels in the US came in better than expected, with the unemployment rate suddenly falling from 7.9% to 6.9%. Nonfarm payrolls rose by 638,000, which surpassed the 530,000 gain and resulting unemployment rate of 7.7% projected by economists surveyed by Dow Jones.
The Bureau of Labour Statistics also reported a decline of 1.52 million in the overall unemployment level, and an increase of 0.3% to 61.7% for the labour force participation rate. The month of October also saw an increase in job growth, with employment levels rising by 2.24 million. However, the employment gains would have fared even better had it not been for the loss of 147,000 temporary Census workers in the government sector. Nonetheless, they were partially offset by private job creation, which increased from 892,000 in September to 906,000.
Indeed, the sudden drop of 147,000 Census workers put downward pressure on the public sector, which saw government employment fall by 268,000 across local, state, and federal levels. Over the last several months, government hiring has been uneven not only due to temporary Census workers, but also because of reduced demand for public school and university workers. With respect to local and state levels, employment in education dropped by 97,800 and 61,400, respectively.
Nonetheless, the employment growth throughout the month of October brings the total payroll gains to 12 million since May, but still leaves approximately 10 million jobs unfilled since they were lost in March and April. The leisure and hospitality industry, which has been hit disproportionally harder during the pandemic, was able to continue its rebound into October with the addition of 271,000 positions.
The continued growth comes as bars and restaurants rehired their workers, despite new daily coronavirus cases hitting record-highs over the last several weeks. However, employment levels in this sector still remain 10.1 million below February levels.
Information for this briefing was found via the BLS. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
