Unemployment Rate Falls to 6.9% as 630,000 Jobs Return in October
Last month, it seems that more Americans went back to work. According to the latest Labor Department report, the United States economy gained 630,000 jobs in October. That’s more than the 503,000 that economists surveyed by MarketWatch had anticipated. More specifically, private sector hiring reached 906,000, although a decline in government employment brought down the overall figure. Meanwhile, the unemployment rate fell one percentage point to 6.9% — significantly lower than expected.
While the addition of jobs is always welcome, the latest numbers don’t mean the United States is out of the woods yet. For one, despite gains in recent months, the economy is still well shy of where it was pre-pandemic. Secondly, COVID-19 cases are once again on the rise in many parts of the nation and in other countries — namely in places such as France, Germany, and the United Kingdom, leading to new lockdown orders being put in place. Should this trend continue, similar restrictions could hit the U.S., once again depressing employment. Lastly, while many of the economic strides seen since reopening began can likely be attributed to the efforts of the CARES Act, further stimulus actions have yet to come to fruition.
Of course, this news also comes as Americans await the final results of the presidential election. At press time, it looks as though Democrat Joe Biden will cross the 270 electoral vote threshold as he currently leads in several pivotal states. However, projections also suggest that the Republicans will retain control of the Senate while Democrats continue to rule the House. This shift in political power could mean that further stimulus deals are now possible — although the split in Congress could still prove problematic.
Offering insight on the October report, Jefferies LLC money market economist Thomas Simons told MarketWatch, “We should not expect to see anything nearly this strong in the months ahead, but it is encouraging nonetheless.” Additionally, Joel Naroff of Naroff Economic Advisors shared similar sentiments, stating, “The recovery in the economy and the labor market remained on track in October. Can we keep it up? It is all about the virus, not any underlying weakness in the economy.”
Overall, as encouraging as this latest report is on its own, there’s more than enough reason to remain trepidatious. In fact, some economists fear that a drop in employment is possible this month — a time when seasonal hiring typically ramps up. If that’s the case, hopefully Congress and the White House can put the contentious election behind them and move forward on another round of economic stimulus support.