The Jobs Keep Coming

The economy’s rebound continues to defy the Fed’s pessimists

WSJ editorial.

"Friday’s labor report showing that employers added 906,000 private jobs in October again beat forecasts. The economy’s resilience is befuddling the pessimists, much as Tuesday’s election results confounded media pollsters.

The jobless rate fell to 6.9% last month from 7.9% in September even as labor force participation ticked up 0.3 percentage points to 61.7%. Total employment rose 638,000 despite a 268,000 decline in government jobs—mostly education and temporary Census. No surprise, schools on remote learning need fewer workers.

Private job growth was broad-based and especially strong in leisure and hospitality (271,000), retail (104,000), construction (84,000), health care and social assistance (79,000) and transportation and warehousing (63,200). As state restrictions have eased, businesses have continued to increase hiring. Grocery and home-improvement stores employ more than they did a year ago. 

Keynesians at the Federal Reserve and on Wall Street have continued to predict the economy would fall off a demand cliff without trillions in new government spending. But their forecasts keep missing. The Fed June jobless rate prediction for the end of the year was 9.3%, which it cut to 7.6% in September, but the rate is already 6.9%. Too many people are still out of work, but progress has been remarkable since the government-induced recession. The economy will continue to grow as long as the U.S. avoids policy mistakes, including another lockdown."