The US economy added 638,000 jobs during the month of October and the jobless rate fell to 6.9%, crushing economists’ predictions of 530,000 and 7.7%.
The private-sector gained 906,000 jobs and the public sector lost 268,000, with the latter affected by the release of 147,000 temporary census workers.
Overall, the labor market has recovered 12.1 million of the 22 million jobs lost due to the coronavirus pandemic.
Industries that hired the most workers in October were among those hardest hit by the pandemic – including hospitality, leisure, retail, auto, and construction. Bars and restaurants hired nearly 200,000 workers.
On the flip side, nearly one-sixth of workers hired in October took temporary positions and employment at small businesses continued to fall. The number of employees hired to work in retail during the holiday season is down 35% compared to last year.
“Consumers are still anxious to go into stores because they’re worried about their health and safety,” explains economic Jack Kleinhenz, and retailers are expecting a massive influx of online orders.
Online shopping this holiday season is expected to reach $189 billion – up 33% from last year – and even more if we receive another round of stimulus checks. According to ZipRecruiter, seasonal job postings that include the term “warehouse” have increased from 1% last year to more than 33%.
In the meantime, a rise in COVID infections has spurred another round of restrictions in some areas.
According to federal data, roughly 3.7 million Americans are unemployed due to a permanent job loss resulting from COVID and another 3.2 million are temporarily out of work.
These numbers could increase significantly when cold weather prevents restaurants from serving guests outside. Walt Disney has already decided to lay off more than 11,000 workers from its Orlando location by the end of the year.
“The ongoing public health crisis will continue to weigh on economic activity, employment, and inflation in the near term, and poses considerable risks to the economic outlook over the medium term,” warns the Federal Reserve.
Economic output is 3.5% lower than it was at the end of 2019 despite a record increase of 7.4% (33.1% annualized) during the third quarter (read more here).