The news of U.S. payrolls growing by 150,000 in October 2020 came as a relief to some, yet a disappointment to others. Although the number of new hiring was less than what was predicted, the news signals that the U.S. economy is still not out of the woods, after being hit hard by the pandemic-driven recession.
The 150,000 net addition was only half of the expected 600,000, prompting speculation over why the number of people hired was so much lower than expected. Some theorize that it could simply be a sign of firms’ continued uncertainty due to the ongoing pandemic, while others suggest that it might be a result of higher-than-expected levels of disruption and the pace of the recovery, affecting employers’ ability to fill openings. In either case, economists are cautioning that although the number of new hires in October was a step in the right direction, it indicates that the labor market still has a long way to go before returning to pre-pandemic levels.
What is certain is that the labor market has not yet fully recovered. Data released this month demonstrated that millions of Americans remain unemployed, and the number of those who have been unemployed for more than six months has also gone up. Further, the significant slow-down in October job gains, when compared to September, suggests that recent momentum could be leveling off as the pandemic continues, making further unrest inevitable.
Thus, although the increase in U.S payrolls is certainly a good sign, it mustn’t overshadow the magnitude of the situation, as recovery still remains a ways away.