U.S. Labor Market Extends Gains as Jobless Rate Falls to 6.9%

The U.S. labor market improved in October by more than forecast, defying expectations for more subdued gains amid an intensifying pandemic and lack of additional fiscal relief.

Nonfarm payrolls increased by 638,000 after an upwardly revised 672,000 gain the prior month, according to a Labor Department report Friday. That compared with the 580,000 median estimate of economists surveyed by Bloomberg, and reflected a decline of 147,000 in temporary Census workers.

The unemployment rate fell to 6.9% from 7.9%, a bigger decline than economists projected.

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U.S. stock futures pared losses after the data, while 10-year Treasury yields rose.

Progress in the U.S. labor market is holding up as household savings help fuel spending and business investment rebounds, providing whoever wins the presidential election with an economy that’s in better shape than many analysts expected just six months ago.

Yet jobs remain 10 million below pre-pandemic levels, and with coronavirus infections rising at a record rate this week, maintaining the pace of hiring may be difficult.

Other figures point to an increasingly fragile labor market beneath the headline numbers. The number of long-term unemployed — those jobless for 27 weeks or more — increased by 1.15 million to 3.56 million, the highest level since early 2014.

— With assistance by Chris Middleton, Jeff Kearns, Edith Moy, and Sophie Caronello

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