Good news about the economy continued to pour in during Election Week. Predictably, the nation’s establishment press, obsessed with its self-appointed insistence that Joe Biden is the nation’s president-elect, virtually ignored it.
On Nov. 6, the government’s October jobs report revealed that the nation’s unemployment rate dropped a full point to a seasonally adjusted 6.9 percent, while nonfarm payroll employment increased by 638,000. The reported unemployment rate smashed expectations that it would only drop to 7.6 percent, while the employment increase beat expectations by 58,000.
The report’s detail was even stronger than its headline numbers. The survey used to determine the unemployment rate reported that an astonishing 2.2 million more Americans were working in October than in September, and that 1.5 million fewer were unemployed. The separate survey of employers used to report official job additions showed that the private sector added more than 900,000 jobs (the lower overall number was primarily due to the release of census workers in the government sector).
Thus, in the six months since the March-April COVID-19 lockdowns:
- The unemployment rate has dropped 7.8 points from its high of 14.7 percent, erasing 70 percent of that rate’s 11.2-point rise from 3.5 percent during the lockdowns.
- The economy has recovered 12.1 million of the more than 22 million jobs lost (12.3 million of more than 21 million in the private sector).
One can’t help but wonder how much better even these strong numbers would be if it weren’t for the serious restrictions on business activity seen in so many deep-blue U.S. states and cities. Just two of the most notorious examples—New York City (14.1 percent unemployment in September) and California (11.0 percent)—caused September’s national jobless rate to be a half-point higher.
Readers should not be surprised if they are unaware of all of this good news. The afternoon after the jobs report’s release, Jose Vazquez at the Media Research Center’s NewsBusters blog reported that “ABC’s Good Morning America (GMA), CBS This Morning and NBC’s Today (including the Third Hour of Today) blacked out the news entirely.” Yet this largely unreported news about the strengthening economy is present virtually no matter where one looks.
Businesses throughout the land are generally upbeat. On the Monday before Election Day, the Institute for Supply Management announced that its index of manufacturing business sentiment reached 59.3 percent in October, matching its highest level in two years. Any reading above 50 percent represents expansion.
New orders and production, the index’s two key activity components, both came in well above 60 percent. Later in the week, the institute’s services and hospital sentiment indices, which track the rest of the private-sector economy, also came in at strongly positive levels of 56.6 percent and 63.0 percent, respectively.
While acknowledging their unprecedented challenges in trying to accurately gauge the economy after the COVID-19 recession, it’s clear that the strong economic recovery so far has surprised even highly experienced and objective economic firms with major corporate clients.
IHS Markit is the leading firm involved in estimating the nation’s monthly gross domestic product. In early August, IHS estimated, after strong post-lockdown economic growth in May and June, that there would be “zero growth of monthly GDP in each month of the third quarter,” and that annualized third-quarter growth compared to the second quarter would be 20.1 percent. The government’s first estimate for the third quarter released on October 29 came in at an annualized 33.1 percent.
In early October, even after estimating that annualized July and August growth came in at 19.0 percent and 7.1 percent, respectively, IHS predicted “roughly no change in monthly GDP in September.” Last week, the firm estimated that annualized September growth was 12.1 percent.
In an email exchange, when asked about their September miss, an IHS spokesperson replied that: “The upward revision to September reflected unexpectedly strong reports on: September retail sales (10/16); September net exports of goods (10/28); September business inventories (10/28).”
The post-pandemic economic recovery was clearly strong in September. The most recent jobs report indicates that this strength persisted into October. What will happen after that is sheer speculation until we learn the genuine winner of the 2020 presidential election.
This article has been corrected since publication.
