October Jobs Report
- November 12, 2020
Economic Recovery Sees Momentum Slipping
Slowing in jobs gains shows need for lame-duck Congress to enact a compromise stimulus package
Key Takeaways
- US nonfarm payrolls rose by 636,000 jobs in October, above the consensus median forecast of 580,000, and a slight slowing from September’s 672,000 add. The overall gain in jobs would have been higher if not for the roll-off of 147,000 temporary census workers.
- Private payrolls advanced by 906,000 with manufacturing adding 38,000, and leisure and hospitality sector firms adding 271,000 jobs as more restaurants and hotels reopened.
- The unemployment rate dropped to 6.9%—down a full point from September as the labor force participation rate rose three-tenths to 61.7%.
- Although the payroll gains point to US economic resilience, fully one-third of the unemployed in September have been jobless since April. This raises concerns of permanent job losses that could hold back future gains.
In our view, the slowing in the pace of job creation points to the urgent need for additional fiscal-policy support to keep the economy growing while the nation—and the world— awaits a vaccine for the deadly COVID-19 virus. Today’s jobs report showed that private sector firms were continuing to add jobs in mid-October, when the report was compiled. Those gains, however, in our view are at risk so long as the US Congress fails to reach an agreement to extend further aid.
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John Stoltzfus
Title:Chief Investment Strategist, Oppenheimer Asset Management Inc.
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