The October U.S. jobs report was a positive surprise, with U.S. employment continuing a steady rebound from the nadir of the spring, but the numbers mask weaknesses in the labor market and could hinder future efforts to stimulate the economy, economists told S&P Global Market Intelligence.

The U.S. added 638,000 jobs in October, topping the Econoday consensus economists' estimate of 575,000 new jobs and dropping the country's unemployment rate to 6.9% from 7.9%.

But the lower unemployment rate is a "poor" labor market health indicator, Oxford Economics researchers said, noting that the labor force participation rate, at 61.7%, is historically low. The firm estimated that the combination of workers laid off and those categorized as employed but absent from work puts the real unemployment rate closer to 9%.

And the positive monthly topline numbers while the economy has still yet to recover about 10.1 million of the 22 million jobs lost could lessen the pressure on lawmakers to pass another federal relief bill, jeopardizing further gains.

"The labor market continues to heal, but we have a long way to go, and unfortunately the October employment report likely reduces the odds of fiscal stimulus passing this year," Ryan Sweet, senior director for Moody's Analytics, said in an interview.

Sen. Majority Leader Mitch McConnell, R-Ky., and House Speaker Nancy Pelosi, D-Calif., have both signaled a desire to get a bill done before the end of the year. Still, squabbles over the price tag of such relief have stonewalled negotiations, and that is not expected to change any time soon.

Much of the surge in jobs in recent months has been due to spending under March's CARES Act, said Jim O'Sullivan, chief U.S. macro strategist for TD Securities, and the uncertainty over further relief comes as daily new COVID-19 cases in the U.S. eclipsed 121,000 on Nov. 5, marking a single-day high. The U.S. has also now had consecutive days with new daily cases over 100,000.

"The ongoing surge in COVID cases also cautions against extrapolating from the strength in today's data," O'Sullivan said.

Sweet said the recent surge in COVID-19 cases could have a bigger effect on the job market in November and December. Specifically, the jump in restaurant employment in October could "quickly" reverse because of the increase in virus cases and cooler weather in the Northeast and Midwest, which makes outdoor dining less appealing, he said.

Retail fared well in October, with 104,000 added jobs, as did leisure and hospitality, which was buoyed by a month of 271,000 job gains.

Mark Vitner, senior economist for Wells Fargo Securities, said the rise in hiring at department stores and clothing stores could reflect efforts to move holiday shopping forward in the event that virus cases force additional lockdowns. He added that independent restaurants are most at risk of shuttering operations entirely and laying off staff, especially as outdoor dining becomes less viable with cooler weather.

Coupling rising virus cases with overall anxiety among consumers could very well mean "much weaker" jobs numbers in the coming months, said James Knightley, chief international economist for ING Economics.

"Should bars and restaurants be forced to close again, those improvements seen in leisure and hospitality employment will swiftly reverse," Knightley said. "Retail would also be vulnerable."