Hiring stays at solid pace in October but signs of caution as virus worsens
WASHINGTON (AP) — Defying fears of another slowdown, U.S. businesses kept hiring at a solid pace in October yet there are signs they remain cautious about the economy’s future as the pandemic worsens.
The Labor Department said Friday that employers added 638,000 jobs and the unemployment rate tumbled a full percentage point to 6.9%, extending what has been a faster recovery than many economists expected in the spring.
But the pace of
hiring isn’t robust enough to rapidly soak up the millions of Americans
who were thrown out of work by the pandemic recession.
The job
gains were little changed from September’s 672,000 and less than half
August’s 1.5 million. But the increase was stronger than it appears: It
was held down by the loss of about 150,000 temporary Census jobs.
Excluding governments at all levels, private businesses added a healthy
906,000 jobs. That figure has held steady for three months.
Overall,
the latest jobs report suggests the tentative recovery remains intact,
for now, and that the economy is continuing to adapt to the pandemic.
“It
was a pleasant surprise to see that the pace of the recovery hasn’t
slowed down,” said Nick Bunker, an economist at Indeed, the job search
website. “But we all need to keep in mind the huge hole that we’re in,
in terms of jobs and unemployment.”
Hiring rose in retail,
including in online retail, where many Americans have turned during the
viral outbreak. Warehousing and courier services have both added jobs in
every month since the pandemic, including last month.
In a sign
of the uncertainty clouding the economy as the virus surges, companies
also added more than 100,000 temporary workers. That suggests they are
seeing more demand from customers but aren’t sure how long it will last
and are reluctant to make permanent job offers. The length of the
average work week also rose, evidence that employers pushed their
current staff to work more rather than take on new workers.
Federal Reserve Chair Jerome Powell and many Wall Street economists have urged Congress
to approve more government aid to support families and businesses,
particularly as the pandemic rages and colder weather threatens recent
hiring gains among restaurants and bars, which had been able to serve
more customers outdoors.
But the prospects for more stimulus have been scrambled by the election, which appears likely
to result in a victory for Democratic candidate Joe Biden, while
possibly preserving a Republican majority in the Senate. That could mean
any additional aid will be postponed until at least next year.
The
job market and the overall economy remain under intensified pressure
from the accelerating pandemic. On Thursday, the nation broke another
record in the seven-day rolling average for new cases, hitting nearly
90,000. Daily new cases were also on track for another day above
100,000, with surging numbers reported all around the country, including
a combined nearly 25,000 in Texas, Illinois and Florida.
The
nation still has 10.1 million fewer jobs than it did before the viral
outbreak intensified in March. At the current pace of hiring, it would
take until February 2022 to regain all those jobs. Still, that would be
faster than the 2008-2009 Great Recession, when it took more than five
years to recover the jobs lost.
The gradual recovery of the job
market has affected Americans in uneven ways and widened inequalities.
Lower-paid workers in industries like restaurants, hotels, and health
care have seen their jobs and incomes recover much more slowly than
white-collar workers who have largely worked from home. Many of them
have also benefited from a surge in home equity and from the Federal
Reserve’s ultra-low-rate policies, which have fueled gains in the stock
market.
Women have been more likely to leave the workforce
than men since the pandemic began, particularly since school started,
with many schools operating only online. That has forced many working
mothers to quit jobs.
And the unemployment rate for Black workers,
at 10.8%, fell sharply in October but remained much higher than for
whites, which dropped to 6%. Hispanic unemployment fell to 8.8% from
10.3%.
Some companies have benefited from the ways the pandemic is
reshaping the way Americans work and live. With one-fifth of the
employed working from home, the government’s report showed, spending on
services such as cleaning, painting and remodeling has jumped.
That’s
kept Premium Service Brands busy. The Charlottesville, Virginia,
company owns seven home service businesses, including Maid Right, 360
Painting and Handyman Pro.
“As far as hiring goes, we’re in full
swing,” said Paul Flick, founder and CEO. “People are investing more
money in the place they’re spending their time in.”
Flick said
his company’s franchises have increased hiring roughly 25% since the
pandemic struck. Many of their new hires used to be cleaners at hotels
or lost jobs in other service businesses.
Yet many other firms
are still struggling. JMBrennan Inc., a third-generation mechanical
engineering firm in Milwaukee, has had to lay off some employees because
of the pandemic and the uncertainty it has created. The company
installs and fixes plumbing, heating and air conditioning systems, but
demand has fallen as office buildings and schools remain empty.
And with the pandemic worsening, few businesses are thinking of expanding.
“Does
anybody need a brand new office tower?” Brennan asked. “Does anyone
need a new hospital?” His firm finished work in June on the new 25-story
BMO Bank Tower in downtown Milwaukee that he estimates has maybe 35
people in it. Workers are unlikely to return if the pandemic continues,
he said.
“We’re not shutting down the economy, but the fact that
Covid is still there leaves a lot of uncertainty,” he said. “You don’t
need to expand if no one is in your building.”
The economy, which
had rebounded sharply in the July-September quarter as businesses
reopened from virus-related shutdowns, is now expanding more slowly.
Many businesses may struggle as the weather turns colder. Consumers
could also pull back again on shopping, traveling and other activities
to avoid contracting the virus.
Still, some parts of the economy
are recovering steadily. Manufacturing output is still rebounding, with
Americans stepping up their purchases of cars, homes and housing-related
goods like appliances and furniture. Home sales have also risen as the
Fed has pushed mortgage rates to nearly record lows.