Labor Market Recovery Continues, Unemployment Rate Drops

November 06, 2020

The number of private sector payroll jobs jumped by 638,000 in October and the unemployment rate fell from 7.9 percent to 6.9 percent, with the household survey reporting 2.2 million more Americans working last month.

The U.S. Bureau of Labor Statistics conducts two surveys to estimate job growth.  The household survey, which is used to estimate the unemployment rate, shows an average monthly job gain of 2.1 million over the past 3 months, and the employer survey shows an average monthly payroll job gain of 934,000 over the past 3 months.  While it is not unusual for the two surveys to differ, they track each other well over time, which suggests stronger payroll job growth numbers in the future.

The COVID pandemic continues to hold down state and local government jobs, particularly in education.  State and local education lost another 159,200 jobs in October.

Employers have now restored 54.5% of the 22.2 million payroll jobs lost in March and April, and at the current pace of hiring, employers will have restored all of the jobs lost to COVID by December 2021.  

Those industries with the largest job gains include:

  • Hotels, restaurants and bars (+226,400);
  • Professional and business services (+208,000);
  • Retail trade (+103,700);
  • Construction (+84,000);
  • Transportation and warehousing (+63,200);
  • Health care (+58,300); and
  • Other services (+47,000).

Education services lost 21,500 jobs along with federal (-138,000), state (-65,000), and local governments (-65,000).

Long recovery ahead?  The next wave of COVID cases is likely to increase social distancing restrictions until spring while other business adaptations are likely to limit job growth well into the future.  Automation and AI implementation may also limit future job gains.