Employers added 638K jobs in October, including 1.4K in accounting

Employment increased by 638,000 jobs in October, including 1,400 in accounting and bookkeeping, the U.S. Bureau of Labor Statistics reported Friday, and unemployment declined 1 percentage point to 6.9 percent as the economy continues a slow recovery despite the ongoing COVID-19 pandemic.

Job gains mostly occurred in the leisure and hospitality, professional and business services, retail trade and construction sectors, but employment in government declined as federal census jobs disappeared and state and local governments were forced to cut jobs amid declining tax revenues.

More unemployed people returned to the workforce in October, although millions remain out of work since the start of the pandemic. The labor force participation rate increased by 0.3 percentage point to 61.7 percent in October. However, the number of long-term unemployed (those who have been jobless for 27 weeks or more) increased by 1.2 million to 3.6 million, accounting for 32.5 percent of the total number of people who are currently unemployed. Average hourly earnings increased by 4 cents to $29.50.

“When you turn to the BLS statistics, what’s encouraging there is job growth,” said Philip Noftsinger, executive vice president of CBIZ, a Top 100 Firm. “The unemployment level declined and the participation rate went up. That’s exactly what you want to see to indicate that you’ve got a robust recovery that’s on the uptick but also draining out the slack that might be in the market. But we’re still 10 million jobs away from where we were in February, so there’s still a long way to go, but this is what you want to see.”

He noted, however, that in CBIZ’s Main Street Index, which surveys small and medium-size businesses, 11 percent of those surveyed indicated that given their current borrowing capacity they could only survive three or four months. “While we’re seeing good numbers now and we have seen good numbers starting in May and June, this isn’t going to be sustainable in the current environment given the muted level of economic activity,” said Noftsinger. “We need more support, both monetarily and fiscally, although I think the Fed has done about all they can reasonably do. You heard this from the Fed chair [Jerome Powell] yesterday: We need to get back to the business of supporting our economy. “

On Friday, CBIZ released its Small Business Employment Index, which reported a seasonally adjusted gain of 1.18 percent in October. CBIZ found that small business hiring grew in all four regions, with the West seeing the most significant increase, at 2.61 percent, followed by the Southeast at 1.14 percent and the Central region at 1.11 percent, and the Northeast with more modest growth of 0.49 percent. Hiring increased in states that opened after May 15 by 1.5 percent. For states that opened on or before May 15 , however, hiring declined 1.28 percent. Small business hiring overall also trended negatively in some industries on CBIZ’s index, including construction, wholesale distribution, financial services and real estate. Industries that reported hiring gains include transportation, accommodation and food services, nonprofits, retail trade and health care.

“We’re seeing several industries continue to rebound from the economic shutdown, and as we move through the holidays, employment levels and consumer spending will offer insight into the sustainability of economic recovery,” Noftsinger noted. “We’ll be carefully watching consumer confidence, which has leveled out after the increase in September, as well as whether the U.S. follows Europe in implementing additional lockdowns, as this could shake up the small business employment landscape.”

Andrew Harrer/Bloomberg