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Economy Recovers 638,000 Jobs as Unemployment Falls to 6.9%

Signaling a continued slowdown in recovery, the U.S. economy added back just 638,000 jobs in October while the unemployment rate dropped to 6.9%.

(CN) — Signaling a continued slowdown in recovery, the U.S. economy added back just 638,000 jobs in October while the unemployment rate dropped to 6.9%.  

Last month’s gain falls short of the 672,000 jobs added in September and the 1.5 million recovered the month before that, and pales in comparison to the 4.8 million jobs that were added back in June.

The labor market is still 10.1 million jobs short of where it was before the coronavirus crisis began. More than 20 million jobs were lost in March and April when the pandemic shut down businesses and kept people at home.   

Friday’s report from the Labor Department comes three days after a presidential election that Democrat Joe Biden appears likely to win.

Elise Gould, senior economist at the Economic Policy Institute, said at this rate it will take years for the economy to fully recover. She noted long-term unemployment is on the rise and families struggling to stay afloat aren’t getting any relief from Washington.

“As the winter approaches and Covid-19 cases continue to rise, millions of people across the country will be left out in the cold,” she wrote. “Unlike his predecessor, the incoming Biden administration will inherit a devastated labor market that will need considerable relief and stimulus—quickly.”

Private sector businesses recovered 906,000 jobs in October, including 271,000 in the leisure and hospitality industry, which includes restaurants and bars hit hard by the pandemic. Professional and business services added back 208,000 positions last month and retail trade recovered 104,000.

But that number was offset somewhat by the loss of 268,000 government jobs, including 147,000 temporary Census positions and 159,000 jobs in state and local government education.  

The new unemployment rate of 6.9% is down 1 percentage point from September.

“New month, same story. The recovery continues, but we still don’t know how long it will take,” said Nick Bunker, economic research director at Indeed Hiring Lab.

Bunker pointed to the gain in private sector positions as a sign of continued momentum while noting the drop in government jobs could be a problem if budgets don’t get federal help.

“These are all positive developments during a bleak time,” he wrote. “It is heartening to see the general pace of the recovery continue, but overall payroll employment is still 6.6 percent below its February levels, and employment rates are still well below what they were earlier this year.”

The Covid-19 pandemic, meanwhile, is only intensifying as Americans wait to find out who their next president will be. The U.S. reported a record 121,000 new virus cases on Thursday, breaking records set earlier in the week.

Federal Reserve Chairman Jerome Powell said Thursday that the central bank will keep interest rates low and asset-purchasing programs running for some time as the pandemic recovery slowly progresses.

“We are a long way from our goals, and we’re sort of halfway there on the labor recovery at best,” Powell said. “There are parts of the economy where it’s going to be hard until there’s a vaccine.”

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