US economy to fall into recession after November 5 election results?

US job report in October showed that employment growth almost stalled during the corresponding period. The Labor Department's closely watched employment report on Friday was the last major economic data before Americans head to the US election 2024 polls to choose between Democratic Vice President Kamala Harris and Republican former President Donald Trump as the country's next president.

However, strikes in the aerospace industry depressed manufacturing employment while hurricanes shortened the collection period for payrolls, making it hard to get a clear picture of the labor market ahead of next week's presidential election, Reuters reported.

"This is not the clarifying report on the economy that Americans and markets needed before next week's election to answer whether voters are better off than they were four years ago," Christopher Rupkey, chief economist at FWDBONDS.


"The one thing we can rule out is that the dramatic slowdown in nonfarm payroll jobs does not indicate the economy is at a tipping point and in danger of falling over the cliff and into recession," Rupkey said.

Nonfarm payrolls increased by 12,000 jobs last month, the smallest gain since December 2020, the Labor Department's Bureau of Labor Statistics said. The economy added 112,000 fewer jobs in August and September than previously reported. Economists polled by Reuters had forecast payrolls would rise 113,000.

The household survey, whose response rates the Bureau of Labor Statistics said were within normal ranges, showed 220,000 people left the labor force in October, offsetting a drop of 368,000 in employment.

Permanent layoffs rose by the most since November 2021, but fewer people experienced longer bouts of unemployment or worked part-time for economic reasons.

A broader measure of unemployment, which includes people who want to work but have given up searching and those working part-time because they cannot find full-time employment, was unchanged at 7.7 per cent. The employment-to-population ratio, viewed as a measure of an economy's ability to create employment, dropped to 60.0 per cent from 60.2 per cent in September.

"The labor market continues to gradually cool, providing the Fed with justification to cut rates again at next week's meeting and in December," said Sam Williamson, senior economist at First American.

FAQs

Q1. When is US election 2024?
A1. US election 2024 polling day is on November 5.

Q2. When will US election results be declared?
A2. US election results will be declared after November 5.