Only hesitant job creation: recovery in the US job market is slowing

The US labor market is continuing to recover from the severe slump in the Corona crisis. The unemployment rate fell in September from 8.4 percent in the previous month to 7.9 percent. Nevertheless, analysts are disappointed and warn: The slow job creation could be dangerous for US President Trump.

A month before the US presidential election, the labor market recovery is surprisingly slowing. After the wave of layoffs caused by corona in the spring, companies outside of agriculture created 661,000 jobs in September, the government announced. Economists polled by Reuters had, however, reckoned with 850,000, after the revised 1.49 million in August and more than 1.7 million in July. The unemployment rate determined in a separate survey fell more sharply than expected to 7.9 from 8.4 percent.

"The verdict on the labor market report is short and sweet: disappointing", says analyst Thomas Gitzel from VP Bank. The recovery is continuing, but the job growth that has been going on since May is much more timid than the brutal loss of jobs in March and April. "On balance, more than 10.7 million jobs have been cut since March," said Gitzel.

In the past five months, just half of the jobs lost in the wake of the corona pandemic have been rebuilt. "Measured against this, the economic record looks devastating for the US President. The slow job creation could endanger the re-election of Donald Trump. Many Americans are dissatisfied with the crisis management of the White House," said Gitzel.

More than 22 million jobs have been lost in crisis

The development of the labor market can be decisive for the outcome of the presidential election on November 3rd, in which incumbent Donald Trump has to prevail against Joe Biden of the Democrats. More than 22 million jobs were lost during the crisis, around half of which have been won back so far.

The US Federal Reserve (Fed) recently changed its strategy in order to achieve full employment again. In doing so, she also has an eye on the integration of socially disadvantaged Americans into the labor market. It could launch new stimulus packages this year. The Federal Reserve had already achieved its goal of full employment before a wave of layoffs set in during the crisis.

. (tagsToTranslate) Economy (t) Unemployment (t) Labor market (t) USA (t) Corona crisis (t) Fed