USA: Labor market develops robustly, but urgent need for action for the new president

In the USA, the hanging game for the presidential election continues. Meanwhile, the Bureau of Labor Statistics reports that the recovery in the US labor market continued at a surprisingly dynamic pace in October. Nevertheless, combating unemployment remains an important challenge for the new president. Above all, the new administration must ensure that the pandemic does not get completely out of control so that new nationwide lockdown measures can be avoided. On the other hand, the households affected by unemployment need new state support as soon as possible.

The unemployment rate in particular has made a remarkable downward turn in October – it fell from 7.9 percent in September to 6.9 percent in October. Many Americans have obviously found a job again, which is gratifying. But there are still more than 11 million people without a job and the number of long-term unemployed has again risen significantly (duration of unemployment of 27 weeks or longer). Because federal subsidies for unemployment assistance have not yet been extended, they are likely to come under increasing financial pressure. This will create a burden for the economy.

And there are also risks for job creation: The private sector has recently been able to create over 900,000 jobs. The companies in the leisure and accommodation industry and the retail trade in particular have made substantial job cuts. This compensated for the large job losses in the public sector: The state had hired a lot of personnel for this year’s census, which it now no longer needs. Nevertheless, employment growth was again respectable at 638,000 overall. However, the situation could quickly deteriorate significantly. This is because new corona infections are also reaching new highs in the USA. Especially in the catering and other service sectors, new regulations are threatening. Recently created jobs could quickly disappear as a result. In this case, a new economic stimulus package would be all the more important for the labor market.

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