Four More Years
BNP Paribas | Nov 06, 2016 06:30AM ET
- The labour market strength held in October
- Above par job creations
- Unemployment rate below 5%
Next Tuesday, Americans vote to decide who will be their next President. They also will vote for a brand new House of Representatives and renew a third of the Senate. Today was published the last economic data before Election Day, the one that everybody understands: the unemployment rate. In October, it was down below 5%. Four years ago, it was 7,8%, down from a 10% peak in end-2009.
Thanks to that figure, it is possible to say that the US economy is in a good shape, that the labour market is consistent with full employment. On top of that, the most closely watched measure of wages was up 2.8% y/y in October, the fastest pace of increase since the recession. Such results should benefit the incumbent. But Barack Obama is not up for re-election, having served two mandates. The Democrat candidate should benefit indirectly, right? Well, if it were as automatic as this, Al Gore would have succeeded Bill Clinton in 2000, and we all know he did not.
This time, the story is a bit different, but the uncertainty is even higher. Admittedly, the Obama years have been the time of the recovery of the worst economic and financial crisis since the 1930s. If generally speaking the US economy is in a much better shape than when Obama became President, that truth does not hold for every Americans. They remain numerous without a job, with an involuntary part-time position, with a wage not high enough to cover their needs. America is better, but it could be much better. So that 4.9% figure everybody understands can be used by either side. No doubt it will. Actually, it already begun…
by Alexandra ESTIOT
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