The U.S. economy added about 638,000 jobs in October and the unemployment rate dropped to 6.9%, according to the U.S. Bureau of Labor Statistics.
Notable job gains occurred in leisure and hospitality, professional and business services, retail trade and construction.
The number of unemployed persons fell by 1.5 million to 11.1 million.
Although the overall number of unemployed decreased, the number of long-term unemployed – those jobless for 27 weeks or more – increased by 1.2 million to 3.6 million, accounting for 32.5% of the total unemployed.
Many of these long-term unemployed workers are in leisure and hospitality.
By contrast, the number of unemployed persons jobless 15 to 26 weeks decreased by 2.3 million to 2.6 million, and the number of persons jobless five to 14 weeks decreased by 457,000 to 2.3 million.
The number of persons who were jobless less than five weeks was about unchanged at 2.5 million.
Wages increased slightly in October. The average hourly wage increased by 4 cents to $29.50.
“October’s jobs report shows continued economic improvement, as total non-farm payroll employment rose by 638,000 and the unemployment rate fell to 6.9 percent, moderately outpacing consensus forecasts,” says Odeta Kushi, deputy chief economist for First American, in a statement. “Notable increases came from leisure and hospitality, professional and business services, retail trade, and construction sectors.
“There is reason to be cautiously optimistic about the state of the economy – six months of expansion is good news, but the deceleration in the pace of improvement signals a slowdown,” Kushi adds. “The path of the economic recovery is beholden to the path of the virus, and COVID cases have been on the rise, indicating new restrictions may be ahead.”
Even if the number of COVID cases stays flat or decreases, and the economy continues to rebound, there remains the ongoing problem of lack of housing inventory.
“In September, the supply of homes for sale fell to its lowest supply level ever,” Kushi says. “Lack of available labor is one of several headwinds faced by home builders today. Today’s report is not only a signal that the broader labor market continues to rebound, but welcome news for a housing market in desperate need of more supply.”