It’s been a gamut of reactions on the American economy over the last few years as the country faced down the realities of the COVID pandemic, and the September Jobs Report from the United States Labor Department has given a longer more nuanced look at the world’s first economy, and has shown what can only be seen as, dare we say it, resilient; but, perhaps the best evaluation is strong, as the US economy added 254,000 jobs, far exceeding the 150,000 expected, and it has also proved to be a pivotal move for future movements from the Federal Reserve Bank as it further calibrates interest rates.
The report also moves the idea of a recession further away from the naysayers who much like Cassandra of mythology, have erroneously predicted a pending recession, often told to us, as we have reported before, in hushed tones, often over fresh produce in the supermarket, or on the crosstown bus.
Those fears allayed, and hopefully put to rest, but this strength has given a push to the waning days of the Biden administration, and also a major push towards the candidacy of Kamala Harris, the Democratic contender for the presidency, and against her rival former President Donald Trump, who in a number of polls has held an edge in how potential voters feel about who has the economic strength in handling an economy once burdened by the pandemic and the subsequent supply chain bottleneck that kept supplies from everything from diapers to blenders on backorder.
Nevermind the fact that presidents have little control over the economy as a free market economy like the US tends to self regulate, or as early undergraduates may remember: the legendary “unseen hand”; Adam Smith anyone?
President Biden in a statement from the White House said that, “with today’s report, we’ve created 16 million jobs, unemployment remains low, and wages are growing faster than prices,” but most importantly, “Under my Administration, unemployment has been the lowest in 50 years, a record 19 million new business have been created, and inflation and interest rates are falling.”.
An unemployment rate of 4.1 percent, underscores the historic record quoted by Biden, and with 7,000 jobs in September, but up from 137,000 since the pandemic.
“It’s an incredible number,” said Diane Swonk, the chief economist at KPMG humorously reported, and added, “The labor market is apparently not cooling as rapidly as we thought. It’s either the most magnificent soft landing we have ever achieved or there is going to be some further consternation about how sustained this can be.”
Another keypoint is that Black unemployment has decreased to 5.7 percent, considered as The New York Times reported, a bellwether for employment, since they are the last to be hired, and the first to be fired.
According to The New York Times, “By several measures, the job market is historically strong. People in their prime working years of 25 to 54 are employed at a rate previously seen only in the early 2000s. Average hourly earnings are strong — and climbing — even when adjusted for inflation. Women in their peak working ages are participating in the labor market at the highest levels on record.”
Wages are now up 4 percent from a year ago, now outpacing the rising prices, but as has been reported inflation has gone down, but there is some suspicion that larger grocers, in particular, have depended on consumers used to paying higher prices to continue to do so, now that the die has been cast.
Nevertheless, “That means buying power is slowly being restored,” said Mark Hanrick, Bankrate’s senior economic analyst. But, as the old adage states, perception is one tenth of the law, and , saying that 40% of Americans are dissatisfied with the economy.
Taking a stronger stance was Heather Boushey with the Council of Economic Advisers, who said, “This is the kind of strong, steady pace that is delivering for people all across the country., and added, “You continue to see evidence that this remains a strong and healthy but not too fast, not too hot economy.”
As seen in prior reports the heavy hitters are still restaurants and bars, as well as construction that has continued its upward climb, a move that Boushey attributes to the Biden administration's prioritization of infrastructure semi conductors and clean energy that has resulted in 25,000 new construction jobs.
Labor force participation has hit 62.7 percent for peak aged workers those aged 25 to 54 years old.
The numbers reflect this reality: Healthcare along with education at 81,000; Leisure and Hospitality at 78,000; at 31,000; and Construction at 25,000.
For the Federal Reserve, it's’ unlikely at its next meeting, in November, that we are going to see significant cuts as it has calibrated these in a series of long running data point decisions; and,earlier with former Chair Janet Yellen who told the Wall Street Journal in 2015, “My own preference would be able to proceed and tighten in a prudent and gradual manner,” and with the current Chair Jerome Powell, who told reporters last week, “Our design overall is to achieve disinflation down to 2 percent without other kinds of painful increase in unemployment that has often come with disinflation processes”, and emphasized, “We haven’t completed that task.”
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