October Job Gains Beat Expectations as COVID-19 Cases Subside

November 5, 2021
Author: Mallory Vachon, Ph.D., Sr. Economist

Job gains went up more than expected in October as COVID-19 cases subsided, and the U.S. recovery gained a much-needed boost.


In October, the U.S. economy added 531,000 jobs — above many economists’ expectations and a major improvement from September. August and September jobs numbers were revised upward by a total of 235,000 jobs.

The economy lost 22.4 million jobs in the early months of the pandemic, and around 4.2 million remain unfilled. Hiring has picked up again amidst record-level job openings, yet businesses continue to face competition for talent and worry about workers quitting or leaving for other opportunities. The October job numbers reflect an improvement from September, this increased job growth makes a 2022 recovery more likely.

Talent Supply and Demand: Disruption Continues

Compared to February 2020, there are currently just over 3 million fewer people in the labor force, comprising those who are employed or unemployed and looking for a job. Some have exited the workforce permanently by retiring early, while others either may be waiting for the pandemic to subside further or are seeking improved working conditions. Despite disruptions, the labor market added more jobs than expected.

COVID-19 cases associated with the Delta variant peaked in September and continued to decline through October. This decline in cases combined with increased vaccination rates may have made some workers and businesses more confident. But lingering pandemic challenges, as well as the upcoming holiday season, may lead some workers to stay on the sidelines until early 2022.

Workers may not want to risk disrupting holiday or travel plans if they contract a breakthrough infection or can’t get the time off. The approval of vaccines for children may improve hiring over the next few months or into 2022 as parents worry less about their children contracting the virus and school closures subsiding due to increased vaccination rates.

The immediate impacts of COVID-19 on the economy labor market have begun to subside. But the labor market is in the middle of a realignment that’s likely to persist into 2022 and beyond. Workers seek more flexibility or better pay and benefits, as well as a company culture that aligns with their needs and values.

Vaccine mandates are leading to short-term disruptions in labor supply for key industries, including healthcare, education and leisure and hospitality. Many workers have opted to be vaccinated, but others have left their jobs or been terminated. Many return-to-office plans were delayed due to the Delta variant. With cases decreasing and some companies planning to return to the office in late 2021 or early 2022, workers are seeking opportunities offer flexibility and hybrid work options that align with their needs.

Jobs Recovery Outlook

The Delta variant put a damper on the hiring surge from earlier this summer, but October’s job gains provide a boost to the recovery heading into the holiday season.

While the economy is adding jobs at a slower pace than earlier this summer, reaching pre-pandemic employment levels is still likely in 2023. And, although unlikely, at a pace of roughly 317,000 jobs added per month — larger than the monthly gains for September but less than the gains for August and October — all jobs lost would be recovered by the end of 2022.


LaborIQ by ThinkWhy reports, forecasts and advises on employment conditions and the impact to jobs, industries and businesses across all U.S. cities.

Related Reads