The latest employment numbers and the presidential election

The labor market situation report for September was published this morning. It turned out to be what everyone had expected: a very small change in the unemployment rate. At 4.1%, it was even slightly below the August value (4.2%). One outstanding question concerned the impact of Hurricane Francine on jobs, but “Our analysis suggests that Hurricane Francine had no discernible impact on statewide payroll, hours worked, and income as measured by the Establishment Survey, or the national unemployment rate as measured by the Household Survey .”

The economy and the election

As important as these publications are in normal times, they become more important in the run-up to an election. In fact, experts say the economy is particularly important to voters this year. As such, it has been a running theme for both parties, with Democrats focused on low unemployment and robust growth and Republicans focused on the recent rise in inflation.

The strange thing about this election campaign is the fact that the Democrats are having to struggle to defend themselves. One might think that they were the high ground, considering that:

• Unemployment, while trending upward, is still extremely low…so low that we haven’t seen numbers like these since the late 1990s (and you’d have to go back to the 1960s). find the one before).
• GDP growth was also very strong, with government programs such as the Inflation Reduction Act making an important contribution.

Although inflation has accelerated for a while, there is no doubt that this is linked to factors outside the US and has calmed down significantly.

Public perceptions

Yet voters have a very bleak – and flawed – view of the economic situation:

“Almost everything Americans believe about the economy is wrong, according to a recent Harris Guardian poll… The poll, conducted earlier this month, found that perceptions of the U.S. economy are often at odds with reality. For example, most Americans (55 percent) believe the economy is contracting, and about the same share believe we are in a recession.”

Unfortunately for Democrats, in these situations perceptions are more important than reality.

Remaining business news

There are three other important indicator announcements before the election on November 5th:

• Oct. 10: CPI (Consumer Price Index)
• Oct. 30: Gross domestic product, third quarter of 2024
• November 1: Employment report

If any of these points are inconsistent with what we have seen recently, it could have an impact on voters.

However, economists do not expect any significant deviation from our current low unemployment, solid GDP growth and moderate inflation. Even if the longshoremen’s strike (now resolved) and recent flooding were to increase prices, the October 10 CPI announcement only covers September. It just wouldn’t show up yet.

This suggests that the releases will contain very little new information and both parties will simply reuse their previous talking points. If the outcome is influenced by the economic situation, it is because one party is better prepared than the other. And while there is evidence that Kamala Harris’ economic message is gaining ground over Donald Trump’s, a lot can happen in a month.

Everyone will be watching these numbers closely.