The U.S. economy added just 12,000 jobs in October 2024, less than most economists expected and providing voters with a downcast bit of data as they head to the polls.

But the figures aren’t that surprising, given the impact of work stoppages at Boeing and the adverse affect of hurricanes Milton and Helene.

The data, released Nov. 1 by the U.S. Bureau of Labor Statistics, had been eagerly anticipated, providing Americans – and the U.S. media – a final snapshot of the jobs market before Election Day on Nov. 5.

But a snapshot is all the report is. What’s more important is the general trend in employment, which gives a more rounded impression of where the U.S. economy is – and where it is going.

So it’s worth taking stock of what has happened over the years since the U.S. last had a change in administration. When President Joe Biden entered the White House in January 2021, the United States was just beginning to come out of the COVID-19 pandemic, and the world was starting to feel the full effects of the global supply-chain crisis it caused.

Since then, the economy has been marked by major swings in both inflation and job market dynamics, the likes of which the U.S. hasn’t seen for decades. Inflation and labor markets are intrinsically linked – you can’t address one without the other.

Encouraging Americans back into work

The U.S. economy has added about 16.5 million jobs across a variety of industries since January 2021.

Most of these gains occurred in the first two years of the Biden administration, when job growth averaged over 1.4 million per month. That’s because, when Americans came out of the pandemic lockdown, they were eager to spend. That surge in pent-up demand led businesses to ramp up production, which in turn required more workers. Businesses went on a hiring spree, but there weren’t enough workers to fill all the open roles, and the result was historically high job vacancies.

Early in the Biden administration, job openings far outpaced new hires. This mismatch was at its worst in March 2022, when there were 11.8 million job openings and only 6.6 million new hires. Since then, this gap has narrowed as the economy has slowed.

Hiring challenges were driven in part by Americans’ relatively slow return to the workforce after the pandemic. Pre-pandemic labor force participation – that is, the number of working-age Americans who are either employed or actively seeking work – peaked in the fourth quarter of 2019 at 164.5 million. Once the pandemic hit in the first quarter of 2020, forcing temporary business closures prompting job furloughs and layoffs, participation declined.

In general, labor force participation falls during recessions and rebounds during recoveries. In early 2020, the U.S. experienced a recession, the shortest on record, lasting just a couple of months.

But this time, workers were hesitant to jump back into the labor market, and participation levels grew more slowly than after previous recessions. There are several reasons why this might have happened. For one thing, evidence suggests that layoffs prompted by the shutdown pushed many Americans to opt for early retirements.

Some data suggests that getting back into the workforce was particularly difficult for women, many of whom opted to stay out of the workforce to save money on child care expenses. Finally, there was speculation that the extension of the now-expired CARES Act – that is, the US$2.2 trillion Coronavirus Aid, Relief and Economic Security Act passed by Congress in March 2020, which provided direct subsidies to Americans and expanded unemployment insurance for those affected by the pandemic shutdown – discouraged reengagement with the workforce.

Whatever the reason, while businesses were quick to post job openings, the labor force was slow to respond. Indeed, it took two years to reach pre-pandemic labor force levels.

But the nation’s labor force has now rebounded well past its pre-pandemic level and is growing steadily.

What’s up with inflation?

Inflation has been a major issue over the past four years and followed a similar trajectory as job openings: coming in hot before slowly cooling down. Inflation is intrinsically linked to labor markets.

Inflation began to surge in 2021, shortly after Biden came to office. On a quarterly basis, by the summer of 2022, prices had increased about 7% from the year before. And it wasn’t just in the United States – the inflation surge was a worldwide event. Germany, for example, experienced 7.9% inflation in 2022. Other countries witnessed even more severe inflation. Turkey, for example, experienced a staggering 72.3% increase that same year.

While most economists agree that the major culprits for worldwide inflation were food and energy shocks caused by the war in Ukraine and global supply chain disruptions, wage increases due to businesses competing for scarce workers also forced prices up.

In 2021, wage growth was about 2% per year. By the end of 2022, wages were growing by about 4% from the year prior. Over this period, however, general inflation outpaced wage increases, placing a lot of pressure on tightening American budgets.

Since 2022, the Federal Reserve has been trying to reduce inflation by increasing interest rates, and by and large, it has succeeded. Indeed, over the past two years, wage growth has outpaced inflation.

Back to normal … and then?

So looking back at the past four years, the U.S. economy can be seen as a tale of two eras. In 2021 and 2022, the economy was rocked by significant labor shortages and historically high inflation rates, while 2023 and 2024 saw a slow and steady return to normal.

No one can predict what a new administration will ultimately bring, but the economy seems to be poised for slow and stable growth going forward – even if inflation is still a little higher than policymakers would like, and there is room for more job growth. The U.S. economy seems to be experiencing a steady and healthy recovery.

Christopher Decker does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.