Economic Indicators | Coronavirus

News from EPI October jobs report: Next president inherits a devastated economy with millions out of work

As the nation continues to be consumed with the election—which Joe Biden appears poised to win—millions of people across the country remain out of work. The latest data from the Bureau of Labor Statistics show that 638,000 jobs were added in October, a continued slowdown in job growth. The U.S. economy is still down 10 million jobs from where it was in February, before the pandemic hit. Using average monthly job growth over the year ending February 2020 as the counterfactual, the jobs deficit is over 11.6 million. In other words, that’s 10.0 million fewer jobs we have than in February, plus nearly 1.6 million jobs we would have added if the recession hadn’t occurred.

Even without the 147,000 loss in temporary Census employment in October, the economy added only 785,000 jobs. At this pace, it will take years for the U.S. economy to fully recover. With long-term unemployment on the rise and little hope for additional relief, workers and their families do not have years to keep their heads above water. As the winter approaches and COVID-19 cases continue to rise, millions of people across the country will be left out in the cold. Unlike his predecessor, the incoming Biden administration will inherit a devastated labor market that will need considerable relief and stimulus—quickly.

Key numbers from today’s report:

  • Long-term unemployment (27 weeks and over) continues to rise, increasing by 1.2 million in October. With the expiration of enhanced (PUA) and extended (PEUC) unemployment insurance benefits set to expire on December 26, it is clear that more pain is on the horizon for these workers and their families. Policymakers have the power to reduce that pain by provided enhanced benefits and further extensions.
  • The unemployment rate for Black workers remains higher than the peak of the overall unemployment rate in the Great Recession. In October, Black unemployment improved but remains elevated at 10.8%. White unemployment is now at 6.0%, while Hispanic and Asian unemployment both declined to 8.8% and 7.6%, respectively.
  • The employment-to-population ratio (EPOP) of workers across demographic groups remains depressed. In particularly, the EPOP for Black men and Black women as well as Hispanic women remains over 6 percentage points lower than in February. White men and white women have much less distance to travel to return to pre-pandemic employment levels, down 3.4 and 3.3 percentage points,  respectively.
  • State and local employment continues to decline, falling 130,000 in October. The labor market is down 1.3 million state and local government jobs over the last eight months—most of it (more than 1.0 million) in education. Austerity stifled the recovery from the Great Recession. We must not make that mistake again. Senate Republicans could fix this immediately by stopping their blocking of aid to state and local governments.
  • The data show that it is far from true that “everyone” is working from home because of the pandemic. Only 21.2% of employed people report having teleworked or worked at home in the last four weeks because of the pandemic—less than one in four workers.
  • The decline in unemployment in October came almost entirely from those who had been temporarily laid off. The number of workers who had been permanently laid off (or completed temporary jobs) ticked up, from 4.50 million to 4.51 million. This does not bode well for the pace of the recovery.

Policymakers cannot ignore the economic devastation happening to workers and their families across the country. The hopes of a quick recovery have long since been dashed, but swift action can lessen the continued hardship faced.

See related work on Unemployment | Jobs and Unemployment | Coronavirus

See more work by Elise Gould