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State of the Labor Market

October 2020 Jobs Report: Continued Progress, but More Work to Go

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The US economy gained 638,000 jobs last month, and the unemployment rate is at 6.9%, down from 7.9% in September.

The recovery maintained momentum, but there’s still a deep hole to climb out of. Fears that the pace of recovery would slow did not materialize, but at the same time, we are not seeing the pace pick up, either. 

Unemployment fell without a jump in longer-term joblessness. Non-temporary layoff unemployment did not increase, and the core unemployment rate ticked down slightly. It was also positive to see the labor force participation rate pick up, as well as the share of workers with a job increase. 

The pace of private sector payroll growth also picked up, which is another sign of continued momentum. However, the decline in public sector employment, particularly state and local government, could become more concerning if government budgets don’t see any fiscal help from the federal government.

These are all positive developments during a bleak time. It is heartening to see the general pace of the recovery continue, but overall payroll employment is still 6.6 percent below its February levels, and employment rates are still well below what they were earlier this year. New month, same story. The recovery continues, but we still don’t know how long it will take.