The U.S. economy added more jobs than expected in October and the unemployment rate fell sharply even as Americans continue to grapple with Covid-19 and its dampening impact on business.The Labor Department reported Friday that nonfarm payrolls increased by 638,000 and the unemployment rate was at 6.9%, both better than expectations of 530,000 jobs added and an unemployment rate of 7.7%.CNBC studied the net changes by industry for October jobs based on data contained in the employment report.The leisure and hospitality industry continued its rebound after the coronavirus and efforts to contain its spread walloped spending at restaurants, hotels and bars earlier in the year.The sector, which added 271,000 jobs last month, saw about 80% of that growth from restaurants and bars that rehired workers even as the U.S. set records for new daily Covid-19 infections. Despite the labor market’s stronger October, employment was below its February level by 10.1 million, or 6.6%.While much of the month’s upside came from the food service industry, some of the largest losses came from the public sector. Government employment fell by 268,000 across federal, state and local levels.Government hiring has been choppy in recent months thanks to a combination of volatility in federal hiring for the 2020 Census as well as weak demand for workers at public schools and universities.On the federal level, the Labor Department said government employment decreased by 138,000 thanks to a loss of 147,000 temporary 2020 Census workers. On the state and local levels, education employment fell by 61,400 and 97,800, respectively.The professional and business services sector was a bright spot in October with a net addition of 208,000 jobs. The government said about half of that gain was thanks to the hiring of temporary help workers.Employment also increased in services to buildings and dwellings (+19,000), computer systems design and related services (+16,000), and management and technical consulting services (+15,000).”Notable job gains occurred over the month in leisure and hospitality, professional and business services, retail trade, and construction,” the government said in a release.”Retail trade added 104,000 jobs, with almost one-third of the gain in electronics and appliance stores (+31,000),” the Labor Department added. “Employment also rose in motor vehicle and parts dealers (+23,000), furniture and home furnishings stores (+14,000), clothing and clothing accessories stores (+13,000), general merchandise stores (+10,000), and nonstore retailers (+9,000).”— CNBC’s Nate Rattner and Crystal Mercedes contributed reporting.