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Good News: US Unemployment Rate Drops To 6.9%

Updated : April 5th, 2023

us unemployment rate drops to 6.9%

The release of the Employment Situation, October 2020, has good news for all Americans as the US unemployment rate dropped to 6.9%. There was a decrease in the unemployment rate across all worker groups and a fall in the number of people temporarily laid off, but the number of permanently laid-off workers has not dropped.

Huge Drop From April Values

These numbers are massive improvements from April 2020, when the national unemployment rate had soared to 14.7%, with 23.1 million people unemployed. The number of those unemployed permanently was at 2 million and remains unchanged. However, the rates are not uniform across states.

State Unemployment Rates: Now And Then

Among the states, Hawaii has the highest unemployment rate at 15.1%, and Nebraska has the lowest unemployment rate at 3.1%. In April, the unemployment rate in Hawaii was 22.3%, while Nebraska was at 8.1% and still one of the lower states. The highest unemployment rate in April belonged to Nevada at 28.2%.

Why Did The Unemployment Rate Rise In April?

The unemployment rates in America progressively rose from February to May then began to decline. The initial spike was due to strict lockdowns across the country that severely crippled the states with dominant tourism, food, and hospitality sectors. It became nearly impossible for these businesses to operate. The two sectors, as mentioned earlier and retail trade were the worst affected, and the loss of disposable income further compounded the problem.

Now, as the number of COVID-19 cases has hit a constant day-to-day emergence, lockdowns have eased globally. However, sectors like aviation, cruise shipping, and tourism continue to suffer as footfall has not revived, nor is it likely to happen anytime soon.

Some industries have high unemployment during any recessions, as they are driven by demand and supply; the higher the disposable income, the higher the demand. Ultimately, the entire economy is deeply connected. The pandemic even shook up sectors like education and health services, long considered immune to recessions.

Why Is The Unemployment Rate Now Dropping?

As the restrictions have eased and people are slowly but carefully going to eat out again, the food and beverage industry is reviving. Although tourism is still a no-go and frowned upon, a few locations managing social distance are seeing some footfall. Job creation is slowly returning.

Some sectors like e-commerce and IT services did not see any significant decline in jobs as they adapted very well to remote work. Demand for home deliveries resulted in strengthened logistics networks and increased hiring in these sectors. 

Video conferencing software companies like Zoom saw unprecedented growth during this time, as did online education platforms like Coursera. Some of the technology proliferation brought about by the pandemic will likely continue and spur further growth for innovative service companies. All this leads the US unemployment rate to drop.

How Is COVID-19 Still Impacting The Economy And Employment?

Some sectors may have seen a permanent negative impact on employment. Museums were severely affected due to the loss of funding, making it hard for them to keep staff. The American Alliance of Museums conducted a survey in June 2020, wherein the majority reported planning to reopen by July-August 2020 but could do so only by October 2020.

44% of the respondents had furloughed staff and have opened with reduced staff. They have to overhaul their operations to reduce the spread of the coronavirus. Some small museums may close down permanently without government aid.

Construction is another sector that added 789,000 jobs over the last six months. However, peak employment has not been reached as many projects were canceled or pushed back. Houston had a booming construction industry that is now waiting to see how energy demands shape up after the pandemic as many plants in the area have rolled back production.

Most of the lost jobs are in low-wage-paying industries that constitute 30% of all jobs in regular times. Now 52% of the lost jobs are from these sectors. These results usually measure the U1 unemployment rate that excludes many other types of jobseekers.

What Problems Has Unemployment Caused?

It is not a coincidence that American households face a rise in hardship measures along with the increase in joblessness. The Census Bureau Household Pulse Survey reveals that even in October-November, 16% of adults living in rental households were behind on rent payments. These households also happen to have large numbers of people who have food hardship.

80 million adults reported difficulty paying for the usual household expenses like groceries, mortgage, car payments, etc. The levels are not yet back to pre-pandemic statuses. Even with assistance programs, a large number of people get excluded.


The new presidency has a lot of challenges to meet to get the economy back on its feet. Most economic sectors require stimulus packages to sustain demand and survival, for which bipartisan support will be essential. 


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