While the US was looking at the results of the electoral battle for the presidency this week, one of the bell choirs for the economy indicated that the winner would achieve a sustained recovery.
The US added 638,000 jobs in October, the government said on Friday, and more than 900,000 in the private sector. The unemployment rate was also less than half of the new epidemic of 6.9% during the coronovirus crisis of 14.7%.
Better-than-expected reforms in the labor market are good news for Democrat and former Vice President Joe Biden, who will be the next head of the White House when the election results arrive. He voted for President Trump in a tight election.
A rapidly expanding economy could have given Biden some breathing space in his administration, especially if a lame session of Congress passes another fiscal stimulus package before the session ends.
“Jobs’ data indicates that the next White House will be the successor to an economy that still has a big hole to fill but has a good moment behind it,” said Neil Dutta, head of macroeconomics at Renaissance Macro Research said.
The economy is not free and clear, however.
For one thing, there has been a record increase in cases of coronovirus in the past one month, unless it is soon under control, it may put a brake on recovery.
Many businesses that typically cater to large crowds of customers, such as airlines, hotels, restaurants, theaters and public transportation, simply cannot restore normal operations until a coronavirus fad or vaccine is found.
“The path to economic recovery is following the path of the virus, and COVID cases are increasing,” said First American deputy chief economist Odita Kushi.
Read: New coronovirus cases in the US increased by 20% to 121,200
Nevertheless, many companies have found ways to get some glimpse of normality. They adopted a host of new practices to protect employees from viruses and to cater to their customers safely.
A senior executive at a financial company told the Institute for Supply Management in its October business survey, “The adjustments we’ve made at the company have allowed us to reach previous employment levels, and those who have returned to work Huh,”.
Read: Still expanding business in front of latest COVID-19 outbreak
The economy has a long way to go. So far, the US has recovered only about 12 million of the 22 million jobs lost to the epidemic.
Meanwhile, the truncation speed is still quite high. The number of people who lost their jobs and applied for unemployment benefits exceeded 751,000 last week – nearly four times the pre-crisis average.
Read: The decline in unemployed claims slows to a crawl
By mid-October more than 20 million people were also reportedly benefiting, as a result of trade-offs and cuts on companies whose sales have not recovered. For example, sports network ESPN said it would cut 500 jobs last week.
If Washington does not act then the potential unemployment benefit may also expire before the end of the year, possibly another threat to recovery. Initial talks with Democratic and Republican leaders indicated a desire to pass another financial aid bill, but they too failed to do so before the election on 3 November.
In any case, unemployed benefit claims would be an important indicator to look forward to on the relatively mild Wall Street DJIA the following week,
Economic Calendar. Unemployed claims are still falling, but only very slowly, in a sign of continued tension in the labor market.
Also in November is a survey of inflation barometers, a pair of consumer sentiment and small-business owners compiled by the National Federation of Independent Businesses.
The sentiment survey will give a glimpse of what Americans feel about the election.
Republicans have been much more optimistic about their own finances and economy since 2016, but the most recent surveys showed increased confidence among Democrats in anticipation of Biden’s victory.