The U.S. regained 630,000 jobs in October and the unemployment rate fell sharply again to 6.9 percent, said the Bureau of Labor Statistics, reflecting a surprising show of strength for the economy even as coronavirus cases rose to record highs.
“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 BLS said in its press release. “In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined.”
There are still 11 million workers without jobs of the 22 million jobs lost due to the pandemic shutdown, so it will take much more time to bring the employment picture back to something like what prevailed before the pandemic, and “dark days” for COVID-19 infection rates when the holidays kick in lie, both Drs. Fauci and Birx said in recent days.
That means a lot more suffering and deaths this winter and into next year for many, before any vaccine can be widely administered.
Private-sector employment rose by a more robust 906,000, but a sharp decline in government employment pulled down the overall total. The number of persons who usually work full time rose by 1.2 million to 123.6 million, and the number who usually work part time increased by 1.0 million to 26.2 million.
The number of persons employed part time for economic reasons increased by 383,000 to 6.7 million in October, after declines totaling 4.6 million over the prior 5 months.
Federal Reserve Chair Powell said yesterday after the conclusion of their latest FOMC meeting that more pandemic relief aid is needed to keep economic growth expanding, to no one’s surprise. The rise in new cases “is particularly concern,” the Fed chairman said.
It also means much more than relief aid is needed to rebuild the American economy for the future. It took 10 years after the Great Recession for the unemployment rate to drop to its pre-pandemic low.
The U.S. counted 107,872 new infections on Wednesday, according to a New York Times tracker, and at least 1,616 Americans died. In the past week, the U.S. has averaged 91,878 cases a day, a 51 percent increase from two weeks ago.
The U.S. leads the world by cases with 9.49 million and deaths with 233,777, according to data aggregated by Johns Hopkins University, and accounts for more than a fifth of global cases and fatalities.
So Powell’s warning of “tragic’ economic risks if another coronavirus aid package isn’t passed by congress seems obvious.
“Over time, household insolvencies and business bankruptcies would rise, harming the productive capacity of the economy and holding back wage growth,” Powell said. “By contrast, the risks of overdoing it seem, for now, to be smaller.”
And those hurt most by any further delay in passing another relief package that would benefit states as well federal government programs are the essential workers most needed to conquer the pandemic.
Employment of those in the bottom rung of the wage distribution scale remains 21 percent below its February level, while it was only 4 percent lower for workers who receive higher wages.
Harlan Green © 2020
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