U.S. unemployment rate falls to 6.9 pct in October as labor market slowly recovers

By Gao PanXu Yuan
  • World
  • Saturday, 07 Nov 2020

WASHINGTON, Nov. 6 (Xinhua) -- U.S. employers added 638,000 jobs in October and the unemployment rate dropped to 6.9 percent, as the nation's pandemic-ravaged labor market continues to slowly recover, the U.S. Labor Department reported Friday.

"These improvements in the labor market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (COVID-19) pandemic and efforts to contain it," the department said in its monthly employment report.

"In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined," the report said.

Diane Swonk, chief economist at Grant Thornton, a major accounting firm, said U.S. job gains have moderated since the initial rebound late in the spring and early summer, while employment losses due to the pandemic remain substantial.

"That leaves us 10.1 million jobs in the hole compared to the peak in February and is still 15% worse than the losses experienced during the Great Recession of 2008-09," Swonk wrote Friday in an analysis.

"This is at the same time that headwinds to hiring by state and local governments are building and the wounds created by COVID in the labor market are festering," Swonk wrote, urging Congress to approve a new COVID-19 relief package to support the labor market recovery.

In another analysis published Friday, Peterson Institute for International Economics (PIIE) senior fellow Jason Furman and Harvard Kennedy School research associate Wilson Powell argued that the newly released official unemployment rate understates the level of joblessness by 1.5 percent.

With only 2.4 million excess temporarily laid-off workers, the two experts noted that a substantial acceleration of labor market progress could be more challenging in the months ahead.

"The future prospects of the labor market will depend on the trajectory of the virus-new cases and hospitalizations have continued increasing, and on how many people without jobs can quickly connect with their old jobs instead of undertaking the time consuming process of finding a new job, or even a job in a new industry," they wrote, adding it will also depend on the future policy response.

"Congress still has not reached a deal on the extension of additional unemployment benefits, aid to state and local governments, or additional support for businesses-and divided government appears likely to continue," they noted.

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