U.S. Unemployment Rate Reaches Pandemic-Era Low in October as Jobs Spring Back
Here's some good news on the economic front.
- In October, the national unemployment rate fell to 4.6%.
- The 531,000 new jobs created beat economists' expectations.
When the coronavirus pandemic first erupted, millions of jobs were shed within weeks. In April of 2020, the national unemployment rate reached a record high 14.8%.
Things have been improving since then, and last month, that trend continued. In October, the national jobless rate fell to 4.6%, reaching a pandemic-era low. That's a decent drop from September's 4.8% jobless rate.
Meanwhile, job creation soared in October. Non-farm jobs totaled 531,000 for the month, beating economists' expectations of 450,000 new jobs.
Not surprisingly, job growth boomed in the leisure and hospitality sector, one of the hardest-hit corners of the market since the start of the pandemic. Wages also increased 0.4% for the month and 4.9% on a year-over-year basis. That may seem like a big boost, but it actually represents slightly slower growth than the rate of inflation. Still, increased wages are a positive thing.
What the latest jobless data means for stimulus aid
The last round of stimulus checks that hit Americans' bank accounts went out in March. At this point, it's looking unlikely that we'll see a follow-up round anytime soon.
The economy has been steadily improving in 2021, and recently, the number of new jobless claims being filed on a weekly basis has decreased. In fact, if anything, many industries are struggling to hire, so much so that they're going out of their way to entice workers with higher wages and other perks like hiring bonuses.
Of course, the absence of a fourth stimulus check might come as a blow to those whose finances took a hit during the pandemic and haven't yet recovered. The good news, though, is that enhancements to two important tax credits may be sticking around for 2022.
One such credit is the Child Tax Credit. It formally maxed out at $2,000 per child, but this year, it can be worth up to $3,600 per child. Lawmakers initially wanted to keep the boosted version in place on a permanent basis, but currently, they've settled on attempting to keep it around for 2022. Still, if that happens, a lot of families will be in line for more money next year.
The Earned Income Tax Credit also got enhanced for 2021, and lawmakers are seeking to keep the current setup in place for 2022. That should, in turn, make the credit available to more households.
Meanwhile, an abundance of job opportunities could help more people boost their income and shore up their finances in the coming months, especially with schools largely being back to full-time in-person learning on a national level. Last year, many workers struggled to get back into the labor force due to a lack of available or affordable childcare, but the return of traditional school may help in that regard.
All told, October's jobs data is something Americans should be happy about, even if it solidifies the idea that a fourth stimulus check won't be coming in anytime soon. If these jobless numbers continue to improve, it's feasible the unemployment rate could return to its pre-pandemic level at some point in 2022.
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