The U.S. economy added 638,000 jobs in October, the latest sign that the economic recovery has slowed compared to earlier in the summer, amid rising coronavirus cases that continue to weigh on the recovery.
The unemployment rate fell to 6.9% from 7.9%, according to the Bureau of Labor Statistics, which releases the monthly employment report from data gathered during the first half of the preceding month.
It was the smallest monthly gain since the May, when the economy began adding back some of the 22 million jobs lost early on in the pandemic.
The snapshot of the country’s economic health in October arrives at a portentous moment. The U.S. economy has recovered two-thirds of the ground it lost during the first half of the year, and yet has a long way to go and remains vulnerable, economists said.
This week in particular, coronavirus cases have spiked to record heights, with two straight days of more than 100,000 new cases, and epidemiologists warning about the worst yet to come. Meanwhile, the election hangs in balance, as the count to determine a winner—and bring closure to a brutal and wrenching political contest—is ongoing.
More than 21 million people continue to draw some sort of unemployment benefits in what was often compared to the jobless crisis of the Great Depression during the height of the economic shutdown in the Spring.
Congress has yet to agree on a way to extend some of the generous aid programs and eviction protections that many economists credit with propping up the economy during the dire first months of the pandemic. An extra $600 in weekly jobless benefits that helped so many stay on top of their bills expired at the end of July.
“The economy is at a very tenuous moment,” Olugbenga Ajilore, a senior economist at the left-leaning Center for American Progress, said in an interview on Thursday. “Because there’s no further fiscal relief, we could go back and have another downturn and a loss in GDP. So a lot of it is very dependent on what the federal government does. The economy is still struggling and a lot of people within the economy are still struggling.”
Federal Reserve Chair Jerome Powell noted Thursday that the economy had recovered more quickly than had been initially forecast, but he also warned about the threats the economy faced from the coronavirus and increasingly limited consumer spending as some households’ run through their savings.