Washington, Nov 7 (IANS): US employers added 638,000 jobs in October and the unemployment rate dropped to 6.9 per cent, as the nation's coronavirus-ravaged labour market continues to slowly recover, the Labour Department reported.

"These improvements in the labour market reflect the continued resumption of economic activity that had been curtailed due to the coronavirus (pandemic and efforts to contain it," Xinhua news agency quoted the Department as saying in its monthly employment report released on Friday.

"In October, notable job gains occurred in leisure and hospitality, professional and business services, retail trade, and construction. Employment in government declined," the report said.

Diane Swonk, chief economist at Grant Thornton, a major accounting firm, said US job gains have moderated since the initial rebound late in the spring and early summer, while employment losses due to the pandemic remain substantial.

"That leaves us 10.1 million jobs in the hole compared to the peak in February and is still 15 per cent worse than the losses experienced during the Great Recession of 2008-09," Swonk wrote in an analysis also published on Friday.

"This is at the same time that headwinds to hiring by state and local governments are building and the wounds created by Covid-19 in the labor market are festering," she added, urging Congress to approve a new relief package to support the labour market recovery.

In another analysis published on Friday, Peterson Institute for International Economics (PIIE) senior fellow Jason Furman and Harvard Kennedy School research associate Wilson Powell argued that the newly released official unemployment rate understates the level of joblessness by 1.5 per cent.

With only 2.4 million excess temporarily laid-off workers, the two experts noted that a substantial acceleration of labour market progress could be more challenging in the months ahead.

"The future prospects of the labor market will depend on the trajectory of the virus-new cases and hospitalizations have continued increasing, and on how many people without jobs can quickly connect with their old jobs instead of undertaking the time consuming process of finding a new job, or even a job in a new industry," they wrote, adding it will also depend on the future policy response.

"Congress still has not reached a deal on the extension of additional unemployment benefits, aid to state and local governments, or additional support for businesses-and divided government appears likely to continue."