While the US is monitoring the results of this week’s presidential election, one of the economy’s boosters signaled that the winner will inherit the ongoing recovery.
The US government said Friday it added 638,000 jobs in October and more than 900,000 in the private sector. The unemployment rate also dropped to the lowest level of the new pandemic of 6.9%, or less than half from the peak of the coronavirus crisis of 14.7%.
Better-than-expected improvement in the labor market is good news for Democrats and former Vice President Joe Biden, who will be next for the White House if the results go into effect. He took a lead ahead of President Trump in a controversial vote.
The steady expanding economy could give Biden some early breaths in his administration, especially if a bad session of Congress passes another fiscal stimulus before this year. end.
Neil Dutta, head of macroeconomics at Renaissance Macro Research said: “The employment data shows that the next White House will inherit an economy that still has big gaps to fill but a little bit. driving force behind ”.
However, the economy is not free and clear.
For one thing, the record-rising number of coronavirus infections over the past month could hamper recovery unless it’s under control early.
Many businesses that typically serve large numbers of customers such as airlines, hotels, restaurants, theaters and public transport cannot resume normal operation until coronavirus fades away or a vaccine is found.
Odeta Kushi, First American Vice President of Economics, said: “The path of economic recovery is on the way with the virus, and cases of COVID are on the rise, suggesting that new limitations may be ahead. , ”Said Odeta Kushi, First American’s deputy chief economist.
Read: New coronavirus infections in the US rose 20% to a record 121,200
However, many companies have found ways to get back to some normal operations. They have adopted a series of new approaches to protect employees from viruses and keep their customers safe.
“The adjustments we made across the company allowed us to reach the previous level of employment and those who completed the job back to work,” said a senior executive at a company. Finance firm told the Institute of Supply Management in October business survey.
Read: Businesses remain open in the face of the latest COVID-19 outbreak
However, the economy has a long way to go. So far the US has only recovered about 12 million of the 22 million jobs that were lost early due to the pandemic.
Meanwhile, the rate of layoffs is still quite high. The number of people who lost their jobs and applied for unemployment benefits reached 751,000 last week – nearly four times the pre-crisis average.
Read: The reduction in unemployment claims slows the information gathering process
According to the report, more than 20 million people are also receiving benefits as of mid-October, the result of business closures and revenue cuts at companies whose sales have not recovered. Sports network ESPN, for example, said last week it would cut 500 jobs.
Emergency unemployment benefits may also expire before the end of the year if Washington fails to act, potentially posing another threat to recovery. Early talk from Democratic and Republican leaders seemed to signal a desire to pass another financial aid bill, but they also failed before the November 3 election.
In any case, the unemployment claim will be the main indicator to watch for next week on the relatively light DJIA Wall Street,
economic calendar. The unemployment rate is still falling, but only very slowly, showing the persistent tension in the labor market.
Also, on the tap are a pair of inflation barometers, consumer sentiment for November, and a survey of small business owners compiled by the National Independent Business Federation.
The sentiment survey will provide a glimpse of what Americans feel about the election.
Republicans have been much more optimistic about their finances and the economy since 2016, but the most recent surveys show that Democrats’ confidence has increased when Biden’s victory is predicted.