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Good News: US Unemployment Rate Drops To 6.9%

Updated : February 10th, 2021

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.

Conclusion

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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  1. I lived in ga in 2019 and move to florida in 2020 and work for the xmas months in nov-dec. I was told to do a combine wage claim. my question is which state do i file the claim in?

  2. I filed for pua in Ohio back in October 2020.My claim has been in ajudacatuon since 11/1/20.So 2 to 6 weeks is a total understatement! When I call.i am told to basically hurry up and wait some more.I have recently been redetermined and my claim is allowed.but I have one pending issue.How long is too long?

    1. Nicole,

      Unfortunately, nobody has an answer. There are perhaps thousands of pending applications. Please consider the option of visiting an office in the vicinity if safe and feasible.

  3. If you claim your weeks for unemployment and for the next 2 months you still have not received your money. Where can you go in volusia county to talk with a live person

  4. On NYS DOL website, my claim is saying current yet the information is for my old claim with 0 days remaining despite receiving 2 weeks of payments on the new claim and I was able to certify last night. I haven’t received anything; no letters or emails.

  5. I was disqualified for UI benefits for not providing an ID and other forms of identification. How do I fix this?

    1. Hi Mike, I’m in NYS and was at the end of my BYE on 3/14, I was still certifying but wasn’t getting paid. I found out I had to file a new claim because my other was exhausted. I’m still waiting on approval. Maybe you have to file a new claim. I hope this helps.

  6. They say 2-6 weeks it’s more accurate to say 2-6 months; and when you call many of them are rude and unwilling to assist!

  7. someone needs to look into Sharon L. Anton gillette, wyo. or dickinson, nd she is a fraud and has done so many fraudulent things and please look into her

    1. Annette,

      Please report it to the Fraud Division of the Unemployment Office in your state. You can report on the website.

  8. I worked part time for thee years here in florida. I’m currently not working. I’m also retired and collects social security.
    My question is
    Am I qualified to file for unemployment ?

    1. Ruby,

      To be eligible, you’re required to have sufficient hours and earnings. Please use the “Benefits Calculator” available on this website.

  9. So adjudication takes 8 to 12 weeks. Oh okay, that explains why I havent received payment since July. That surely helps just like the rest of the information that you give. And by the way. What’s the NEW reason you can’t get through to the Call Center.

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