The jobs-added figure was the smallest monthly gain since May, when the economy began adding back some of the 22 million jobs lost early on in the pandemic. But the jobs report also noted a modest improvement in job growth compared with many analysts’ expectations.
“The unemployment rate dropped more than expected, and on the back of an increase in the labor force and no increase in permanent layoffs,” said Daniel Zhao, a senior economist at Glassdoor who said the report was a positive one. Still, he said, the pandemic remained a major concern as the virus continues largely uncontrolled.
“Even though today’s report is good doesn’t mean the trajectory of the recovery is set in stone,” he said.
The gains were driven by hard-hit industries such as leisure and hospitality, which added 271,000 jobs; restaurants, bars and other food service places, which added 192,000; retail, which added 104,000; and arts, entertainment and recreation, which added 44,000.
But employment in these industries remains well below their levels from February. Leisure and hospitality is still short 3.5 million jobs; retail is down by about 500,000 jobs. Health care and social assistance, which added 79,000 jobs, is down 950,000 from February. Manufacturing gained 38,000 jobs but remains 621,000 lower than February.
The gains were offset in part by the loss of 268,000 government jobs. The majority, 147,000, were temporary census workers whose employment ended.
Kate Bahn, an economist at the Washington Center for Equitable Growth, said she was concerned that the gains were modest in industries that could be vulnerable as the pandemic results in more layoffs and restrictions.
“These gains are really limited as the pandemic is surging and we’re heading into winter,” she said. “It’s better than expected, but there’s a lot of evidence that it’s still a limited recovery that is really uneven and has exacerbated a lot of inequality that existed before the crisis.”
The snapshot of the country’s economic health in October arrives at a portentous moment.
Coronavirus cases have spiked to record heights, with two straight days of more than 100,000 new cases and epidemiologists warning about the worst yet to come. Meanwhile, the presidential election hangs in balance as the count to determine a winner — and bring closure to a brutal and wrenching political contest — is ongoing.
More than 21 million people continue to draw unemployment benefits in what was often compared to the jobless crisis of the Great Depression during the height of the economic shutdown in the spring.
Congress has yet to agree on a way to extend some of the aid programs and eviction protections that many economists credit with propping up the economy during the dire first months of the pandemic. An extra $600 in weekly jobless benefits that helped many stay on top of their bills expired at the end of July.
The number of people who have been unemployed for six months or longer increased by more than 2 million to 3.6 million.
“The economy is at a very tenuous moment,” Olugbenga Ajilore, a senior economist at the left-leaning Center for American Progress, said in an interview Thursday. “Because there’s no further fiscal relief, we could go back and have another downturn and a loss in GDP. So a lot of it is very dependent on what the federal government does. The economy is still struggling, and a lot of people within the economy are still struggling.”
The racial and gender disparities in employment that have been exacerbated during the crisis continue to plague the data. While the unemployment rate for Whites is 6 percent, it is 10.8 percent for Blacks, 7.6 percent for Asians and 8.8 percent for Hispanics.
And at the most basic level, many Americans are still struggling.
Lakeesha Cooks, 45, a single mother in Augusta, Ga., who does intake assessments at hospitals, rehabilitation facilities and hospice centers, said she had lost about three-quarters of her work since March. She used to make a salary of $60,000 to $70,000, but that has dwindled into weekly payments of $365 from Georgia’s unemployment system.
Her car was repossessed in September, after the extra $600 extra in weekly unemployment payments expired.
Although she was able to scrape enough together to get the car back and has managed to keep food on the table for her and her daughter, she said she is concerned about the future. She has not heard back from any of the more than 30 jobs she has applied for. She is about four months behind on rent and spent much of the past few weeks volunteering to help register voters and get them to the polls in the swing state. She worries how long her landlord will let her continue to live there without paying fully.
“You go to school, you get your education and you think, ‘That’s not going to happen to me,’” she said. “I’m one of the ones that it happened to. When I woke up one morning and my car wasn’t out there — that was a low point.”
There have been some positive signs in the economy, which has recovered two-thirds of the ground it lost during the first half of the year. Job postings, measured by sites such as Indeed and Glassdoor, have continued to rebound, although they remain well below pre-pandemic levels. Certain retail sectors have shown strength and growth, such as auto parts and dealers, building material and garden stores, and sporting goods and hobby stores.
Jack Kleinhenz, the chief economist for National Retail Federation, agreed that the retail sector has shown some surprising improvement. He cited Census Bureau statistics that showed sales in September for much of the sector were better than September 2019. The increase in hiring on the October jobs report reflects the upswing ahead of the coming holiday shopping season, he said. But many small businesses are still hurting — and concerns were growing about the potential for consumer demand to taper off if more stimulus aid is not forthcoming.
“There is certainly momentum and resiliency right now in the economy,” he said. “But nonetheless we believe that additional federal stimulus is still critical to ensure the recovery really doesn’t stall.”
The positive jobs report appeared to further dim the likelihood that Republicans would agree to a large aid package. Senate Majority Leader Mitch McConnell (R-Ky.) said the report was an indication of a “dramatic comeback” in the economy, and he said he would push for a more limited stimulus because of it.
Other data captures a deep stagnation afflicting the recovery. Homebase, which makes employee-scheduling software, said that the hours employees worked in October were virtually flat compared with September — the fourth straight month of near stagnation, it said. States with cooler weather in the Northeast and Midwest saw steeper declines in the number of businesses open, it said. Data from the Ultimate Kronos Group, another scheduling-software company, had similar results, showing that shift work in the retail, food service and hospitality sectors stayed nearly flat in October.
Federal Reserve Chair Jerome H. Powell noted Thursday that the economy had recovered more quickly than had been initially forecast, but he also warned about the threats the economy faced from the coronavirus, as well as decreased consumer spending as some households run through their savings in coming weeks and months.
The labor-force participation rate — another sign of the health of the economy — rose slightly to 61.7 percent, up 0.3 percentage points — but it remains more than a percentage point and a half below its February level. The number of workers who are able to secure only part-time work rose by 383,000, to 6.7 million.
More than a fifth of the workforce continues to work remotely, the Bureau of Labor Statistics said.
Erica Werner contributed to this report.