U.S. Economy Added 638K Jobs in October, Unemployment Rate Dropped to 6.9%
How do you feel about recent trends in the job market?
by Causes | 11.6.20
What’s the story?
- The Bureau of Labor Statistics (BLS) on Friday released its jobs report for October 2020, which found the U.S. economy added 638,000 jobs and the unemployment rate declined by 1 percentage point to 6.9%, exceeding the Dow Jones forecast of 530,000 jobs and a 7.7% unemployment rate.
- The October jobs report builts on the previous employment gains of 2.7 million jobs in May, 4.8 million in June, 1.8 million in July, 1.5 million in August ― each of which surpassed the prior historical record for monthly jobs added (1.1 million in September 1983) ― and 672,000 in September.
- The economy lost 22.2 million jobs in March and April due to lockdown measures initiated to slow the spread of COVID-19, so the six month run of job gains represents about 58% of those that were lost and leaves the economy about 9.2 million jobs below its February level.
- This USAFacts chart shows the monthly unemployment rate dating back to 2007:
Jobs Report Sector Breakdown
- Leisure and hospitality added 271,000 jobs in October, with the largest gains in food and drinking places (+192,000). The sector has added 4.8 million jobs since April, leaving it 3.5 million below its February level.
- Professional and business services gained 208,000 jobs in October, about half of which came from temporary help services. The sector is about 1.1 million jobs below its February level.
- Retail added 104,000 jobs in October, about one-third of which came in electronics and appliance stores. The sector has added 1.9 million jobs since April and is 499,000 below its February level.
- Construction added 84,000 jobs in October, bringing its total job gains since April to 789,000 and leaving the sector 294,000 jobs shy of its February level.
Short-Term & Long-Term Unemployment
- October marked the first time since the pandemic began, the number of unemployed people who lost their jobs permanently exceeded the number of people on temporary layoff.
- There were roughly 3.2 million people on temporary layoff in October, down from a historic peak of 18 million in April. The number of people unemployed due to permanent job loss reached 4.5 million in October, the highest level since October 2013 and more than double when the U.S. had historically low unemployment in 2018 and 2019.
Demographic Unemployment Information
- Unemployment rates declined for adult men (to 6.7% from 7.4% in September), adult women (6.5% from 7.7% in September), and teenagers (13.9% from 15.9% in September). This USAFacts chart shows the unemployment rate by gender dating back to 2007, and how the unemployment rate for women fell below the unemployment rate for men for the first time since March:
- Unemployment rates declined among whites (6% from 7% in September), blacks (10.8% from 12.1% in September), Hispanics (8.8% from 10.3% in September), and Asians (7.6% from 10.7% in September).
Revisions & Data Notes
- Employment in August was revised up by 4,000 from +1,489,000 to +1,493,000.
- Employment in September was revised up by 11,000 from +661,000 to +672,000.
- As it has since March, the BLS published an estimate of what the unemployment rate would have been had misclassified workers been included. The misclassification hinges on a question about the main reason people were absent from their jobs, with people absent due to temporary, pandemic-related closures recorded as absent due to “other reasons” as opposed to unemployed due to temporary layoff.
- Using this approach, the October unemployment rate would have been 0.3 percentage points higher than reported. The BLS notes that this represents the upper bound of their estimate of misclassification and probably overstates the size of the misclassification error.
- According to usual practice at the BLS, data is accepted as recorded in the household survey. To maintain data integrity, no ad hoc actions are taken to reclassify survey responses.
— Eric Revell
(Photo Credit: iStock.com / nikom1234)
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