The US Labor Department recently released its nonfarm payrolls report for October, which showed that the US added 150,000 jobs in the month. This was lower than the expectation of economists who had anticipated 170,000 in job growth. The unemployment rate also declined to 6.9%, a 0.2% drop from the previous month.
The report showed that job growth was strongest in the leisure and hospitality sector, with an increase of 196,000 jobs. The manufacturing sector also saw an increase of 41,000 jobs in October. In addition, government payrolls added 44,000 jobs, while professional and business services saw a decrease of 26,000 jobs.
Overall, the report indicates that while job growth is continuing, the year-over-year rate of job growth in the US is slowing. This is likely due to the continued economic impact of the COVID-19 pandemic, as it continues to impact the labor market and consumer spending.
To cope with the economic and employment crisis due to the pandemic, the Federal Reserve has taken action to keep longer-term interest rates low by cutting the federal funds rate to 0.1% in March. The Fed also promised to buy mortgage-backed-securities and Treasury bonds to drive down borrowing costs for corporations.
While the report is not as positive as had been hoped, the US labor market is showing signs of recovery. However, there is still a long way to go before the US economy can return to pre-crisis levels of employment. Until consumer spending picks up and businesses regain confidence, it is unlikely that the US labor market will see a sustained recovery.
