No, the Labor Department is not giving up on reporting monthly statistics. But the report released on Friday was the last reading on the job market that we will see before the election. It is said that the voters vote with their pocketbooks each year. Of course, this year the economic numbers are skewed significantly because of the pandemic. If you look at one month, the gain of 661,000 jobs would indicate an extraordinarily strong month for the economy.
If you look at the year, we have lost over 10 million jobs during the pandemic. For the past 100 years, we have never had a Presidential election held in the middle of such a severe health crisis — and 100 years ago, during the Spanish Flu pandemic, we were in the midst of a World War. Thus, it is exceedingly difficult to tell how this jobs report or the jobs situation in general will affect the vote. Certainly, the pandemic will affect the way many of us will vote–with more voting by mail and/or before the Election Day crowds hit.
When we look at the economy in general, it is important to understand that the recovery will take some time. Yes, we have recovered over 10 million of the jobs we have lost, and the unemployment rate has recovered to 7.9%. But the time it takes to recover all of the jobs lost will not be the entire story. We typically add two million jobs per year during periods of economic growth. If it takes 12 months to recover the jobs we have lost, we will need to add another two million jobs just to get caught up. And that will take time. The good news is that the Federal Reserve Board is prepared to keep interest rates low, no matter how long it takes. The President and the First Lady being diagnosed positive is a reminder of the challenge we face.
Dave Hershman is the top author in the mortgage industry. Dave has published seven books, as well as hundreds of articles and is the founder of the OriginationPro Marketing System and Mortgage School. Want to send this commentary and other news in a personalized format to your sphere database or on social media? Sign up for a free trial at www.OriginationPro.com.