US payrolls add 638,000 jobs; unemployment rate drops to 6.9%
Friday, November 06, 2020
U.S. employers added 638,000 nonfarm jobs in October after 661,000 new hires in September, according to the federal Bureau of Labor Statistics. October’s rate of unemployment fell to 6.9% from September’s 7.9% and August’s 8.4%. The gradual employment improvement is a result of eased COVID-19 restrictions on social movement and resuming of commerce, though the pandemic remains uncontained and prospects for a vaccine available to the public are unclear.
“The number of unemployed persons fell by 1.5 million to 11.1 million,” according to the BLS. “Both measures have declined for 6 consecutive months but are nearly twice their February levels.” There were 12.6 million persons unemployed in September and 13.6 million in August.
In October, all major worker groups experienced declines in joblessness, according to the BLS. There were 3.2 million workers on temporary layoff in October compared with 4.6 million in September and 6.2 million in August.
Hourly pay inched up in October, with the average hourly earnings for all employees on private nonfarm payrolls rising to $29.50 from $29.47 in September and $29.45 in August, according to the BLS. Unemployment cuts workers’ bargaining power to hike hourly pay. Meanwhile, the average workweek for all employees on private nonfarm payrolls in October was 34.8 hours versus September’s 34.7 hours and August’s 34.6 hours.
In October, midsize firms of 50-499 workers hired 135,000 employees compared with 259,000 in September and August’s 79,000,according to ADP/Moody’s monthly jobs report for nonfarm private-sector payrolls only. Large employers of 500 workers had 116,000 new hires in October compared with September’s 297,000 and August’s 298,000. Small firms with 1-49 workers hired 114,000 employees in October versus 192,000 in September and 52,000 in August.
According to ADP/Moody’s, goods-producing employers added 17,000 jobs in October versus 196,000 in September and 40,000 in August. In the service sector, employers created 348,000 jobs in October compared with 552,000 in September and 389,000 in August. Franchise businesses created 49,600 jobs in October versus 20,700 in September and 21,500 in August.
“The labor market continues to add jobs, yet at a slower pace,” said Ahu Yildirmaz, vice president and co-head of the ADP Research Institute, in a statement.
According to Sen. Majority Leader Mitch McConnell (R-Kentucky), a new package of pandemic aid is front and center of the lame duck session to open next week. Congress was unable to pass relief before the Nov. 3 general election.
“Without congressional action, all remaining pandemic unemployment insurance programs will expire on Dec. 26,” according to Heidi Shierholz, a senior economist at the Economic Policy Institute in the nation’s capital. “Millions of workers are depending on these programs.”
Businesses also depend upon the spending of these workers. Subtracting their purchasing power could well deliver a demand-shock for American employers as 2021 begins.
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