The US added 683,000 net new nonfarm payrolls in October. The headline figure included a 268,000 drop in government workers, and private nonfarm payrolls increased by 906,000. This was close to the average over the past three months. Despite record job gains since May, US employment remains 6.6% below February’s level. It is in a deeper hole than the trough of any previous post-war recession. Nonetheless, the recovery has been strong. If the pace of employment gains experienced over the past three months can be sustained, the US would be back to its pre-COVID level of employment by September next year. However, there are reasons to think that this pace will not be sustained. For one, any further fiscal support is likely to be much less generous than in the spring. Meanwhile, daily new coronavirus cases are surpassing previous peaks. Against that backdrop, we expect softer employment growth in the months to come, with therapeutics or a vaccine possible tailwinds to jobs growth next year.
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