Unemployment in America decreased in October even as coronavirus cases increased, with the federal job report offering signs of improvement and caution.
About 638,000 jobs were added in the U.S. last month, tracking closely to a September that added about 672,000 jobs, according to the Labor Department. The unemployment rate dropped a full percentage point to 6.9% after being at 14.7% in April.
“The strength of this report is really amazing in the face of rising coronavirus cases,” Slate Street Global Advisors chief investment strategist Michael Arone told CNBC. “You would have expected that to start to show up in the data, particularly in places like leisure and hospitality, where the numbers are incredibly strong.”
That leisure and hospitality sector jumped by 271,000 jobs, offsetting the loss of 268,000 government jobs (147,000 of which were Census workers). Construction, transportation, warehousing and manufacturing also made substantial gains.
The overall job growth was about 100,000 more than Dow Jones economists’ projections but it was also the smallest month of job recovery since April. The number of Americans who are in long-term unemployment grew by 1.2 million. One-third of the 11 million unemployed Americans have been out of work for at least 27 weeks.
“Today’s job report reveals continuing improvements in the U.S. labor market, but the rate of employment growth has slowed considerably as economic conditions remain weak and uncertain,” Moody’s Investors Service senior vice president Robard Williams wrote in a note.
The job growth pace will not put the U.S. at pre-pandemic employment levels until 2022, National Association of Federally Insured Credit Unions chief economist Curt Long said in an email to CBS. It’s a work in progress.