U.S. Unemployment at 6.9%

After adding 638,000 jobs in October, the U.S. saw a one percentage point drop in the unemployment rate, according to the Bureau of Labor Statistics (BLS).

The monthly BLS jobs report shows the U.S. had an unemployment rate of 6.9% in October. Despite continuing monthly improvements in employment, unemployment is still approximately twice what it was in February before the pandemic hit. And 10.1 million jobs still haven’t come back.

Right now, BLS estimates that there are 11.1 million unemployed, active job seekers in the U.S.

The job gains seen in October were fewer than the gains recorded in September. Monthly job gains have steadily declined four months in a row, suggesting the recovery from the pandemic-induced unemployment crisis is slowing down.

BLS struggled to calibrate the classifications in their monthly survey to the pandemic when it first hit. But improvements have been made, and in October, BLS reports that its unemployment estimate could be off by 0.3%, but said this represents the “upper bound” of the potential error and likely “overstates” the size of the error.

The improvements in employment are coming as economic activity that paused when the pandemic hit starts back up, according to the report. The number of people returning to work and the workplace is steadily increasing. But the rise in COVID-19, in Wisconsin and many other parts of the country is also increasing, rapidly.

Once again, the leisure and hospitality sector saw the greatest job gains of any in October with approximately 271,000 jobs added. The majority of those jobs were in the drinking and food service industry. Despite the improvement, there remains 3.5 million jobs sector-wide that have not returned since the start of the pandemic.

Approximately 21% of employed persons worked from home in October. Like the steady reductions in unemployment, the number of people that have been teleworking has been steadily dropping in recent months.

Unemployment decreased again in October for all “major worker groups” — as they are defined by the BLS. But Black Americans are the major worker group that continues to experience rates of unemployment significantly higher than the national average at 10.8%. Hispanics (8.8%) and Asians (7.6%) are also experiencing rates above the national average. But the rate among Black people means they are still experiencing unemployment at a level that is roughly equivalent to what the U.S. experienced at the height of the Great Recession.

The number of people experiencing long-term unemployment — which the jobs report defines as being out of work for 27 weeks or more — increased by 1.2 million in October to 3.6 million.

As Urban Milwaukee previously reported, a federal unemployment program called Pandemic Unemployment Emergency Compensation (PEUC) has become a reliable indicator of how many people are experiencing long-term unemployment, as it’s for people that have exhausted their traditional state unemployment insurance. The latest report from the U.S. Department of Labor shows that as of October 17th, there were 3.96 million people claiming PEUC.

Last week, there were 751,000 initial claims for unemployment across the U.S., according to the labor department. That number is holding relatively steady, as the department’s four-week moving average is currently 787,000 initial claims per week.

Also last week, there were 362,883 claims for Pandemic Unemployment Assistance (PUA), a federal program for people that do not qualify for traditional unemployment insurance. Add that to initial claims and there were more than 1 million claims for unemployment last week.

In Wisconsin, over the seven days since the last time Urban Milwaukee reported unemployment figures, there were 17,233 initial claims for unemployment. During that same period in 2019 there were 5,683.

Read the Jobs report here. Read the labor department report here.