One month before the presidential elections, the latest data from the labor market underscore the strong recovery of the US economy in the third quarter. In September, the number of unemployed fell noticeably once again, by a good 1 million compared with the previous month. As a result, the unemployment rate repeatedly made a significant downward turn, falling from 8.4 to 7.9 percent.
The increase in employment was also respectable at around 661,000 persons, even though many observers had expected a higher figure. The service providers in particular increased their personnel. The retail trade and companies in the accommodation and leisure sector in particular hired new employees. This is likely to continue to be primarily a „normalization“, as these sectors suffered particularly badly from the strict corona restrictions and had therefore laid off a large share of their workforce in the spring.
The recovery on the labor market should continue in the coming months. However, the economy will hardly be able to maintain the high pace of growth seen in the summer, as there is a lack of fresh impetus. As a result, the catching-up process on the labor market will slow down visibly from the fall months onwards and thus drag on. Not only is the number of unemployed still almost 7 million higher than before the Corona crisis, the number of long-term unemployed (more than 27 weeks without a job) is increasing in large steps. And the longer unemployment lasts, the more difficult it is to re-enter the job market. The still difficult situation on the American job market will be a challenge for the next president – be it for Biden or for Trump.