As millions of Americans waited longer than in any presidential election since 2000 to learn the winner, the next White House occupant faces the enormous task of keeping the recovery from the pandemic on track.
This comes amid dried up fiscal stimulus and explosion of new Covid-19 cases across the United States, making it the worst-affected country in terms of infection and mortality.
The Labour Department’s closely watched employment report on Friday also showed 3.6mn people out of work for more than six months.
“Initially, the recovery was breathtaking, but has lost much steam,” said Sung Won Sohn, an economics professor at Loyola Marymount University in Los Angeles. “With no fiscal stimulus and the resurgence of coronavirus, job gains will be tougher to achieve in the future.”
“Employment is still only at its late 2015 level,” noted Gus Faucher, chief economist at PNC Financial in Pittsburgh, Pennsylvania. “And at October’s pace, it would take about 16 months for employment to return to its pre-pandemic level,” Faucher told Reuters.
A contested election reduces the chances of another coronavirus rescue package from the government this year. Even if more fiscal stimulus is agreed on, it will likely be smaller than had been anticipated before the election.
That shifts the spotlight to the Federal Reserve. The US central bank kept interest rates near zero on Thursday.
Fed Chair Jerome Powell acknowledged the pace of improvement in the economy and labour market had moderated, noting that the recovery would be stronger with more fiscal support.
President Donald Trump keeps claiming he has built the greatest ever US economy prior to the coronavirus outbreak and that now it’s recovering faster than ever.
It’s true the economy was doing well prior to the pandemic - continuing a trend, which began during the Obama administration - but there have been periods when it was much stronger.
The US economy was then hit by the biggest economic contraction ever recorded as a result of the pandemic. It has since bounced back strongly, but hasn’t regained all its losses.
The latest numbers show economic output surged by an annualised 33% in the third quarter, following a record fall as a consequence of the coronavirus pandemic.
The recovery, although strong, hasn’t yet brought economic activity back to pre-pandemic levels.
Trump said the recent recovery in growth is “the biggest in the history of our country by almost triple...that’s bigger than any nation”.
“Yes, it is the biggest quarterly increase, but by more like double - outdoing the previous peak of 16.7% in the first quarter of 1950,” noted BBC’s Reality Check Team.
However, it said Trump’s comparison with other countries isn’t right. From July to September this year, the economy grew by 7.4% in the US (33.1% is the annualised figure). This is less than Germany, Italy and the Eurozone as a whole.
Neil Shearing, chief economist, Capital Economics said, “If you look at economic growth from the start of the pandemic to the present, the US has done better than Europe but “worse than China and some other Asian economies”.
