Not even hurricanes and strikes can stop Joe Biden's job creation momentum during his tenure in the White House. Although the specter of recession has repeatedly hovered over the economy, jobs have been created every month of his presidency.
Excluding January 2021 (he took office on the 20th), about 16 million jobs were added in 45 months, a record high, thanks in part to the post-epidemic recovery. However, this job creation came to an abrupt halt in October.
The Boeing strike and the impact of hurricanes Milton and Helena lost 12,000 jobs, according to data released Friday by the Labor Department's Bureau of Labor Statistics. This is the lowest reading since the last job destruction in December 2020, and the data was released on the eve of the presidential election. Unemployment still at 4.1%
Economists predict that around 108,000 jobs will be created and the unemployment rate will be 4.1%. The data is skewed by these particular factors, but combined with other data released this week, it suggests the economy is in good shape heading into the election.
The US Commerce Department reported on Wednesday that gross domestic product rose 0.7% in the third quarter (2.8% annual rate), well above the average for developed nations. In the personal consumer price deflator, the Fed's favorite personal consumer price index (PCE) fell to 2.1% in September, just a step short of the 2% target for price stability, although core energy and food inflation (not included) held steady. by 2.7 percent. Friday's report showed that hourly wages have risen an average of 4% over the past 12 months.
Strong growth, a buoyant labor market, "almost" contained inflation and months of purchasing power gains paint an economic outlook that is a far cry from Donald Trump's apocalyptic message.
In fact, the main problem with the US economy is the public account problems with the growing deficit and debt. But not only is it rarely mentioned on the campaign trail, proposals from both candidates, especially the Republicans, would make the situation worse. Although inflation fell, prices did not. Consumers still have fresh memories of recent commodity prices.
Dollars are now cheaper when you go out to eat or shop at the supermarket. This explains some dissatisfaction among voters, especially low-income voters who have been hit hardest by rising commodity costs. Moreover, Republicans could use this isolated job data to sound alarm bells. Separately, Friday's report saw jobs revised up from 159,000 to 78,000 for August and from 254,000 to 223,000 for September.
The Federal Reserve has managed to achieve a soft landing in the economy by raising interest rates, that is, by raising interest rates to contain price increases without causing an economic recession or Great Recession like previous inflationary events (including some milder ones). unemployment.
With poor data in August and signs of weakness in the labor market, Federal Reserve Chairman Jerome Powell launched a bearish currency cycle that began with a massive rate cut of half a percentage point in September.
Friday's employment data was lackluster, marred by hurricanes and strikes, but other recent figures for which it is known show no worrisome signs but a slight cooling. This will allow the central bank to decide on further steps. Investors expect the Fed to cut rates by a quarter of a percentage point to a range of 4.5-4.75% when it meets next Thursday during the presidential election, where the winner may not even be known. They also see another 0.25 percentage point cut as possible, though uncertain, at the meeting due on December 18. The judgment will be decided by the previously known price and employment data.
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