US labour market data – an uncertain and pessimistic future

On November 6, 2020, the US Bureau of Labor Statistics (BLS) released their latest labour market data – Employment Situation Summary – October 2020 – which shows that employment continues to grow, but will take a long time at this rate to make up the job losses incurred in March and April. Further, the unemployment rate fell by 1 point to 6.9 per cent and the participation rate rose by 0.3 points. So, on the face of it, this is a positive outcome – jobs growth, participation increasing and unemployment falling. There is some doubt about the strength of the labour force employment estimates but the payroll data also shows steady employment increases. Worrying trends were in the loss of government employment, particularly at the state and local government level. Those losses will worsen if there is no extra fiscal support applied at that level by the federal government. The impasse at Congress on the the size and design of the next tranche of fiscal support is not helping. And then the data shows the lax health policy is allowing the virus to run out of control and how that plays out is anyone’s guess. I suspect a nation has to get the health problem sorted before they can really sort out the economic problem. The US appears to be going in the opposite direction to that. I doubt it will turn out well.

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