The U.S. economy added 638,000 jobs in October, a slight drop from September, when the economy added 672,000 jobs.
The job gains were enough to push the official unemployment rate down to 6.9% from 7.9% in September.
The U-6 unemployment rate, which unlike the official rate includes discouraged workers who have stopped looking for work and workers in part-time jobs who would like full-time work fell to 12.1% from September’s 12.8%.
And this month’s drop in the unemployment rate wasn’t driven by workers leaving the workforce.The labor participation rate rose 0.3 percentage points to 61.7%, still a low rate on historical standards.
So why didn’t the market move up and strongly on the news?
Partly because stocks had already moved up so strongly this week–the NASDAQ, for example, was up almost 9% for the week–and with a potentially volatile weekend coming up traders and investors didn’t want to chase stocks higher.
But more important, in my opinion, is that this is recent but still trailing news and no one knows what the continued surge in coronavirus cases might do to growth in the weeks ahead. With new daily coronavirus cases in the United States hitting 121,000 yesterday, it’s clear that the pandemic is still surging. one projections say we’ll hit a peak of 200,000 new cases a day before the end of 2020.
And some strategists and economists on Wall Street are pointing toward a slight contraction in U.S. GDP in the fourth quarter, absent, as now looks very possible, a large coronavirus stimulus package.