The U.S. economy gained 531,000 jobs in October 2021. The job gains reflect a recovery since the impact of the COVID-19 pandemic but there's still a long way to go.
October's gains help make up for some of the jobs lost since April 2020, when the economy lost a record 20.5 million jobs as businesses shut down to slow the spread of the COVID-19.
As of October 2021, there were 1.7 million more unemployed people than in February 2020, the month before the pandemic became widespread in the U.S. The big swings in job losses and job gains in 2020 and 2021 reveal the tremendous impact of the pandemic on the U.S. economy.
As the chart below shows, according to Bureau of Labor Statistics (BLS) data, job gains skyrocketed in June 2020 as people started working remotely and Paycheck Protection Program funds reached businesses. Gains began to dwindle through the rest of the year, with more people losing jobs in December than gaining.
Gains during the first three quarters of 2021 have made a dent in total job losses, but the unemployment rate is not back to pre-pandemic levels.
Where Jobs Were Added
Employment in leisure and hospitality sector grew by 164,000 in October 2021, led by a surge in employment at food and drinks services that added 119,000 jobs for the month. Professional and business services gained 100,000 jobs, with sectors such as consulting and management and technical services adding significant jobs.
The manufacturing sector saw 60,000 jobs added driven by employment gains in motor vehicles and auto parts industries. Transportation and warehousing jobs grew by 54,000 jobs in October, and stand at 149,000 more jobs compared the sector's pre-pandemic level in February 2020.
Employment in construction rose by 44,000 in October while the healthcare sector added 37,000 jobs. Healthcare employment has fallen by 460,000 compared to the pre-pandemic levels of April 2020, but the slight uptick in October 2021 was fueled by in-home healthcare services and nursing care facilities.
Many industries are seeing gains in employment as more people receive vaccinations and businesses find ways to keep running.
Employment in retail trade saw a slight uptick, adding 35,000 jobs in October though gains made by food and beverage stores, merchandise and electronic stores among others were offset by job losses in building material and garden supply stores. Retail trade employments remains 140,000 lower than their pre-pandemic levels.
An addition of 28,000 jobs in personal laundry services made up bulk of the employment gains seen by the other services sector in October 2021.
Financial activities added 21,000 jobs and saw employment levels return to those seen in February 2020. This was generally a result of job growth areas such as in rental and leasing real estate, and securities, commodities and investments.
Wholesale trade, mining, and information services saw little job growth but employment in these sectors continues to remain significantly below levels seen in 2019 and 2020.
Where Jobs Were Lost
One main industry lost jobs in October: government education. Local government education lost 43,000 jobs, and state government education lost 17,000. Private education employment, however, saw an increase by 17,000 jobs.
The US Jobs Report Explained
The monthly jobs report is also called the "Employment Situation Summary" and the "Non-Farm Payroll Report." It's a critical economic indicator because it's the first report of the month. It's also the most comprehensive and credible.
The Bureau of Labor Statistics surveys 144,000 non-farm businesses and agencies on the number of jobs, the wages paid, and the hours worked. The jobs report will tell you which industries are adding jobs, whether American workers are working longer hours, and how fast salaries are increasing.
The jobs report also provides the unemployment rate. To get the number of unemployed individuals, the BLS must undertake a separate survey of households instead of businesses. This household report also includes workers' age, gender, and race/ethnicity. The household survey has a more expansive scope than the establishment survey. It includes the self-employed, unpaid family workers, agricultural workers, and private household workers. They are excluded from the establishment survey.
The household survey is not as accurate as the business establishment report, though. This is because it has a smaller sample size. That's why employment numbers are taken from the establishment survey. So the current unemployment statistics often show a different trend than the jobs report.
Other Jobs Reports
There are two other jobs reports. The monthly ADP National Employment Report is released on the Wednesday before the Employment Situation Report. It's produced by the ADP Research Institute, SM, and Moody’s Analytics. It uses business payroll data to report on the number of jobs added in the private sector. It excludes farming, as does the BLS report. But more importantly, it also excludes government jobs, which are included in the BLS report. For that reason, it's considered incomplete.
The ADP Report is useful because it's released just before the BLS report, giving you an idea of what to expect from the BLS.
The ADP report gives some analysts an earlier view of what might happen in the Friday report. ADP is quick to say it's not intended to be predictive. Like the BLS report, it's revised as more data comes in later in the month. These revised numbers are closely correlated with the revised BLS jobs report.
The Department of Labor also releases a weekly jobless claims report. This measures the claims for initial unemployment benefits reported by each state every week. It also says how many of the unemployed are still receiving benefits. This report gives an indication of trends and indicates whether there are more or less unemployed than the week before.
The main value of this report is that it is weekly, which gives some idea of trends between the monthly jobs reports. However, the weekly report is too volatile to be a reliable method of predicting monthly job gains and losses.