The United States is entering the final weeks before the November 3 midterm elections with unemployment at 4.2%, a historically low level, but a labour market that has lost much of the momentum seen in the years following the pandemic.
The latest employment figures show that employers added just 29,000 jobs in September, while employment gains for July and August were revised down by a combined 60,000. The unemployment rate rose from 4.1% to 4.2%.
The figures present a mixed picture for the US economy. Layoffs remain relatively low, but hiring has also slowed, leaving workers with fewer opportunities to change jobs for higher pay. Inflation has also reduced the impact of wage increases on household purchasing power.
The labour force itself has stagnated, partly reflecting tighter immigration policies and deportations. Manufacturing employment is also below its recent peak during the Biden administration.
Despite the weakness in hiring, the 4.2% unemployment rate remains consistent with what economists generally consider close to full employment. The challenge for President Donald Trump and Republicans is that voters’ perceptions of the economy are being shaped not only by unemployment but also by living costs, income growth and access to better-paying jobs.
The September report was the final major employment snapshot before Americans vote, making the state of the labour market an important economic backdrop to the midterm campaign.
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