Unemployment falls below 7% as U.S. adds 638,000 jobs
Employment in the nation increased by 638,000 in October as the unemployment rate declined to 6.9%, the U.S. Bureau of Labor Statistics reported today.
Improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it, the Bureau said.
Unemployment stood at 7.9% in September and 8.4% in August.
Also, the change in total nonfarm payroll employment for August was revised up by 4,000 from an increase of 1.480 million to an increase of 1.493 million while the change for September was revised up by 11,000 from a gain of 661,000 to the addition of 672,000 jobs.
With these revisions, employment in August and September combined was 15,000 higher than previously reported.
“The labor market continues to improve, with another 638,000 net job gains in the latest month and the unemployment rate slashed to 6.9%. That brings the total from the worst of the lockdown in April to 12.1 million jobs recovered. Another 10 million jobs are needed to get us back to the pre-pandemic good economic times. Residential construction and contracting trades added 23,800 jobs in October. For reference, the unemployment rate swung from 3.5% before the pandemic lockdown to 14.7% in April.
Lawrence Yun, chief economist of the National Association of Realtors, said the latest numbers are indicative of the economy and employment continuing a gradual climb.
"As we look into the post-election future, a vaccine will surely become available sometime next year, which will then propel the economy into high gear," Yun said. "Dining at restaurants and attending sports games could be robust as many people unleash savings accumulated during the pandemic months, including from stimulus checks and enhanced unemployment benefits."
Yun also said that Interest rates will continue to hover at record lows assuring a steady flow of homebuyers. "Home construction will further add jobs and help with inventory.”
The biggest job gains for October occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined.
Construction added 84,000 jobs in October. Specialty trade contractors added jobs, both in the nonresidential (+28,000) and residential (+18,000) components.
Employment also rose in heavy and civil engineering construction and in construction of buildings (+19,000 each). Construction has added 789,000 jobs in the last 6 months, but employment is down by 294,000 since February when the pandemic began its spread in the United States.
Retail added 104,000 jobs, with almost one-third of the gain in electronics and appliance stores (+31,000). Employment also rose in motor vehicle and parts dealers (+23,000), furniture and home furnishings stores (+14,000), clothing and clothing accessories stores (+13,000), general merchandise stores (+10,000), and nonstore retailers (+9,000). Employment in retail trade has risen by 1.9 million since April but is 499,000 below its February level.
Employment in transportation and warehousing increased by 63,000 in October, with gains occurring in warehousing and storage (+28,000), transit and ground passenger transportation (+25,000), and truck transportation (+10,000).
But air transportation lost 18,000 jobs. Employment in transportation and warehousing is 271,000 below its February level.
Manufacturing employment rose by just 38,000 in October and remains 621,000 lower than in February. Gains occurred in fabricated metal products (+7,000), primary metals (+6,000), and wood products (+4,000). Employment continued to trend up in food manufacturing (+6,000) and in plastics and rubber products (+4,000).
Average hourly earnings for all employees on private nonfarm payrolls increased by 4 cents to $29.50 in October as the average hourly earnings of private-sector production and nonsupervisory employees rose by 5 cents to $24.82.
The average workweek for all employees on private nonfarm payrolls was unchanged at 34.8 hours in October.
In manufacturing, the workweek increased by 0.3 hours to 40.5 hours, and overtime rose by 0.2 hours to 3.2 hours. The average workweek for production and nonsupervisory employees increased by 0.1 hours to 34.2 hours.
The complete Employee Situation Report for October 2020 from the Bureau of Labor Statistics is available here.