Hiring held last month but signs of caution as virus worsens


Defying fears of another slowdown, U.S. businesses kept hiring at a solid pace in October, yet there are signs they remain cautious about the economy’s future as the pandemic worsens.

The Labor Department said Friday that employers added 638,000 jobs and the unemployment rate tumbled a full percentage point to 6.9%, extending what has been a faster recovery than many economists expected in the spring.

But the pace of hiring isn’t robust enough to rapidly soak up the millions of Americans who were thrown out of work by the pandemic recession.

The job gains were little changed from September’s 672,000 and less than half August’s 1.5 million. Yet the increase was stronger than it appears: It was held down by the loss of about 150,000 temporary Census jobs. Excluding governments at all levels, private businesses added healthy 906,000 jobs. Hiring has held at that level for three months.

Overall, the latest jobs report suggests the tentative recovery remains intact, for now, and that the economy is continuing to adapt to the pandemic.

“It was a pleasant surprise to see that the pace of the recovery hasn’t slowed down,” said Nick Bunker, an economist at Indeed, the job search website. “But we all need to keep in mind the huge hole that we’re in, in terms of jobs and unemployment.”

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Hiring rose in retail, including in online retail, where many Americans have turned during the viral outbreak. Warehousing and courier services have both added jobs in every month since the pandemic, including last month.

But in a sign of the uncertainty clouding the economy as the virus surges, companies also added more than 100,000 temporary workers. That suggests they are seeing more demand from customers but aren’t sure how long it will last and are reluctant to make permanent job offers. The length of the average workweek also rose, evidence that employers pushed their current staff to work more rather than take on new workers.

Federal Reserve Chair Jerome Powell and Wall Street economists have urged Congress to approve more government aid to support families and businesses, particularly as the pandemic rages and colder weather threatens recent hiring gains among restaurants and bars, which had been able to serve customers outdoors.

But the prospects for more stimulus have been scrambled by the election, which appears likely to result in a victory for former Vice President Joe Biden, the Democrat, while possibly preserving a Republican majority in the Senate. That could mean any additional aid will be postponed until at least next year.

The job market and the overall economy remain under intensified pressure from the accelerating pandemic. On Thursday, the nation broke another record in the seven-day rolling average for new cases, hitting nearly 90,000. Daily new cases were also on track to top 100,000 again, with surging numbers reported all around the country, including a combined nearly 25,000 in Texas, Illinois, and Florida.

The nation still has 10.1 million fewer jobs than it did before the viral outbreak intensified in March. At the current pace of hiring, it would take until February 2022 to regain all those jobs. Still, that would be faster than the 2008-2009 Great Recession, when it took more than five years to recover the jobs lost.

The gradual recovery of the job market has affected Americans in uneven ways and widened inequalities. Lower-paid workers in industries like restaurants, hotels, and health care have seen their jobs and incomes recover much more slowly than white-collar workers who have largely worked from home. Many of them have also benefited from a surge in home equity and from the Federal Reserve’s ultra-low-rate policies, which have fueled gains in the stock market.

Women have been more likely to leave the workforce than men since the pandemic began, particularly since school started, with many schools operating only online. That has forced some working mothers to quit jobs.

And the unemployment rate for Black workers, at 10.8%, fell sharply in October but remained much higher than for whites, which dropped to 6%. Hispanic unemployment fell to 8.8% from 10.3%.

Some companies have benefited from the ways the pandemic is reshaping the way Americans work and live. With one-fifth of the employed working from home, the government’s report showed, spending on services such as cleaning, painting, and remodeling has jumped.

That’s kept Premium Service Brands busy. The Charlottesville, Virginia, company owns seven home service businesses, including Maid Right, 360 Painting, and Handyman Pro.

“As far as hiring goes, we’re in full swing,” said Paul Flick, founder, and CEO. “People are investing more money in the place they’re spending their time in.”

Flick said his company’s franchisees have increased hiring roughly 25% since the pandemic struck. Some of their new hires used to be cleaners at hotels or lost jobs in other service businesses.

Yet other firms are still struggling. JMBrennan Inc., a third-generation mechanical engineering firm in Milwaukee, has had to lay off some employees since March. The company installs and fixes plumbing, heating, and air conditioning systems, but demand has fallen as office buildings and schools remain empty.

And with the pandemic worsening, few businesses are thinking of expanding.

“Does anybody need a brand new office tower?” Brennan asked. “Does anyone need a new hospital?” His firm finished work in June on the new 25-story BMO Bank Tower in downtown Milwaukee that he estimates has maybe 35 people in it. Workers are unlikely to return if the pandemic continues, he said.

“We’re not shutting down the economy, but the fact that COVID is still there leaves a lot of uncertainty,” he said. “You don’t need to expand if no one is in your building.”

The economy, which had rebounded sharply in the July-September quarter as businesses reopened from virus-related shutdowns, is now expanding more slowly. Many businesses may struggle as the weather turns colder. Consumers could also pull back again on shopping, traveling, and other activities to avoid contracting the virus.

Still, some parts of the economy are recovering steadily. Manufacturing output is still rebounding, with Americans stepping up their purchases of cars, homes, and housing-related goods like appliances and furniture. Home sales have also risen as the Fed has pushed mortgage rates to nearly record lows.

Last month, The United States added more than 600,000 jobs to the economy and the unemployment rate continued to drop, reaching 6.9% — a new low since the pandemic started to take hold in the United States.

That said, the economy still has more than ten million fewer jobs than before the pandemic. And the monthly jobs numbers continue to reveal profound disparities between groups within the labor market.

The Indicator has reassembled its team of employment market observers, aka The Jobs Friday Ninjas, to break down the BLS report and explain what it means for the American economic recovery.

 The American job market is clawing its way back — steadily if slowly — from the devastation inflicted by the coronavirus-caused recession. What no one knows is just how long it might take for workers to be made whole.

In October, the government said Friday, employers added 638,000 jobs. It was a solid gain, more than economists had expected. And it was even stronger than the headline number suggested.

Yet even with last month’s hiring, the economy has regained barely 12 million of the 22 million jobs it lost in March and April when the virus suddenly paralyzed much of the economy.

Now, a surge of confirmed infections to record highs — which could accelerate as the weather gets colder — threatens the tentative economic comeback. So does Congress’ failure to provide another jolt of aid for individuals and businesses now that a multi-trillion-dollar financial rescue package enacted in March has expired.

Much of the job market’s improvement thus far comes from businesses bringing back employees they had furloughed in the spring. But many job losses have turned permanent: The number of Americans who have been unemployed for six months or longer jumped by 1.2 million — 48% — in October.

“Our next president will undoubtedly inherit a challenging labor market in which millions of Americans remain unemployed,” said Karen Fichuk, CEO of Randstad North America, which manages to hire technology, engineering, and manufacturing companies

Here are five takeaways from the October jobs report:


The unemployment rate tumbled to 6.9% last month from 7.9% in September. That sharp drop occurred even as the number of Americans who are either working or looking for work rose by 724,000.

A big increase like that could cause unemployment to rise. New job seekers, after all, often need time to land a job and would be considered unemployed until they do. But last month, the number of employed Americans actually rose by 2.2 million while the count of unemployed fell by 1.5 million.

A proportion of Americans who are either working or looking for work — what economists call the labor force participation rate — ticked up to 61.7% from 61.4% in September. Still, it remains down from 63.4% in February, before the virus flattened the economy.


Companies across an impressively wide range of industries hired in October. Overall, the private sector added robust 906,000 jobs. That gain offset the loss of 268,000 government jobs, including about 150,000 temporary Census positions.

Leisure and hospitality companies, which include hard-hit restaurants and hotels, added 271,000 jobs last month on top of 406,000 in September. Even with those increases, the sector remains down nearly 3.5 million jobs from February — a testament to the depth of losses in those industries.

Retailers added 104,000 in October. Construction jobs surged by 84,000 as super-low mortgage rates and pent-up demand for houses from people adapting to working from home continued to fuel a housing boom.

Businesses added 109,000 temporary workers, up from a tepid 22,000 in September. That could be a sign of business optimism: Companies often hire temps to test the market before committing to permanent hires.


Women, as a group, are continuing to be left behind in the jobs recovery. They accounted for just 280,000, or 44%, of the jobs added last month. Because they work disproportionately in vulnerable jobs —- at restaurants, bars, and beauty shops, for instance — women account for 5.5 million, or nearly 55%, of the 10.1 million jobs that remain lost.

Since February, nearly 2.2 million women ages 20 or older have stopped working or looking for a job, versus just 1.4 million men. Some women stopped working to care for children stuck at home until their schools reopen.


Last month’s burst of hiring benefited Black, white and Hispanic workers. Compared with September, employment rose by 785,000, or 3%, for Hispanics; by 433,000, or 2.5%, for African Americans; and by nearly 1.7 million, or 1.5%, for whites.

Black and Hispanic Americans were also much more likely than whites to enter the labor market last month.

Still, disparities between races persisted in unemployment: The jobless rate in October was 6% for whites, versus 10.8% for African Americans and 8.8% for Hispanics.


Forced to work at home when the pandemic hit hard this spring, many Americans have returned to their offices, stores, and other worksites. The Labor Department said 21.2% of Americans were teleworking last month, down from 35.4% back in May.

Who is teleworking? The answer varies widely: 47.4% of Americans with advanced degrees and 35% of those with bachelor’s degrees worked from home. This compares with only 7.1% of workers with only a high school diploma.

More than 35% of Asian Americans worked from home, compared with 20.7% of whites, 17.8% of African Americans, and 12.7% of Hispanics. Just 18.8% of men teleworked last month, compared with 24% of women.

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