What’s Going On Here?Friday’s US jobs report was the last before November’s presidential election, but no one’s riding off into the sunset just yet: the country added a lower-than-expected 661,000 new jobs in September. What Does This Mean?Economists had predicted the US would add 859,000 jobs in September, but the actual figure fell short – and that's despite the 145,000 jobs added to the previous months’ totals. That suggests the economy’s growth has slowed from August’s sharp recovery.
It’s true that the unemployment rate fell by more than expected, from 8.4% in August to 7.9% last month. But that was more down to a drop in “labor force participation” than a bump in job numbers (tweet this). In other words, more out-of-work people than expected stopped looking for jobs. They’re not counted among the “labor force” or the unemployed, which reduces the unemployment rate. It’ll likely rise soon in any case – especially if last week’s job cuts from United Airlines, American Airlines, and Disney are anything to go by. Why Should I Care?For markets: He’s aced another test.
Investors usually pay close attention to US jobs reports as they’re a pretty good indicator of how the economy’s doing. Economic growth figures, after all, are too backward-looking by the time they’re released, and survey data can be unreliable. But those investors might’ve been more concerned by the news that the US president tested positive for coronavirus, which seemed to cause stock markets across the globe to fall on Friday.
The bigger picture: You shall not pass.
The Federal Reserve’s been asking the US government to spend more on battling coronavirus, and the House of Representatives obliged by putting forward a new $2.2 trillion support package late last week. But it still needs approval from the rest of the government, and investors hoping the president’s first-hand experience of the pandemic will break the impasse could be sorely disappointed. | 