(Reuters) – The unemployment rate in the United States fell to 7.9% in September from 8.4% in August, a significant drop in normal times that would be good news for the presidency as it seeks re-election in just over a month.
These are not normal times.
As the most famous labor market summary statistic, Michael Brown, chief US economist at Visa, said the unemployment rate in the United States is a “psychologically significant number” for voters.
But President Donald Trump’s announcement on Friday that he had contracted the new coronavirus pushed that number into the background: Brown said that voters may “weigh the news about the virus a little more than the economic data at the moment.”
The fall in the unemployment rate for September, reported by the Labor Department on Friday, extends a sharp downward trend from the 14.7% recorded in April, which was the highest level since the Great Depression.
But the other details in the report do not fit easily with Trump’s account of a reviving economy.
Monthly job gains slowed. Overall, of the 22 million jobs lost since February, the economy has regained about half.
Jobs fell off the cliff
“Getting the other half back is going to be much more difficult,” said Michael Aaron, chief investment analyst at State Street Global Advisors.
It should be noted that about 865,000 women left the workforce last month, as the data shows, about four times the number of men. The report showed that Latinas accounted for more than a third of this decrease.
These residents are key to Trump’s hopes for re-election as well as the hopes of Democratic presidential candidate Joe Biden.
The women’s mass exit from their jobs coincides with the start of the school year in the United States, with many children learning online and at home.
“These numbers are really what parents have been shouting for months, but in the form of economic data,” said Michael Madowitz, an economist at the Center for Left-leaning American Progress. “I cannot imagine that this will help win over the electorate.”
Friday’s report counted more than 12 million Americans among the unemployed, a demographic less likely to appear in surveys than employees, and studies. Here Consistently shown.
But in the current context, there is a twist: voter turnout among the unemployed tends to rise when unemployment is generally high.
Amber Wichowski, a professor of political science at Marquette University in Wisconsin, has studied thousands of state and local elections and found that higher unemployment is associated with higher turnout, and that Republican incumbents are “more likely (than Democrats) to be punished with poor unemployment numbers.”
In the November 3 election, she said, it could be very different: a public health crisis could suppress voting if people are anxious about casting their vote in person.
Moreover, it is difficult to find a clear pattern linking unemployment rates to the presidential turnout, or the outcome.
Where was unemployment before the last elections?
The unemployment rate was nearly as high as it is now when voters chose Jimmy Carter, the Democrat, over Republican President Gerald Ford in 1976, when Carter lost to Republican rival Ronald Reagan in 1980, and when Democratic Arkansas Governor Bill Clinton ousted Republican President George W. HW Bush in 1992.
It was also roughly high when Americans reelected Democratic President Barack Obama in 2012.
Other economic news
High-frequency data tracked by Reuters shows that shifts in a variety of industries increased last week and approached 95% of levels at the start of the year. Estimates of retail traffic based on mobile data have moved above the March 1 level, before the state of emergency was declared, according to information from Safegraph. Here.
Consumer sentiment jumped sharply in September, despite the final reading Here From its monthly University of Michigan survey on Friday it indicated that the gains were being driven by Democrats, with only slight improvement among Independents and Republicans.
The government reported Thursday that the number of Americans filing new applications for unemployment benefits decreased for the week ending September 26, but remained high, and personal income declined in August, underscoring the importance of another government bailout package that economists say is necessary to maintain. Recover from developing more information.
Going into this week, the number of new COVID-19 cases has risen for two weeks in a row in 27 of the 50 US states. Federal Reserve officials and others have repeatedly said that the course of the virus is of prime importance in the economic outlook.
(Reports written by Anne Sapphire) Co-reporting by Lucia Motikani and Howard Schneider. Edited by Paul Simao