UPDATE AT 8:50 a.m. FRIDAY:
Obama and Romney will both have something to crow about in the monthly national jobs report, which shows 171,000 added positions in October and an uptick in the unemployment rate to 7.9 percent from 7.8 percent.
The change in the jobless rate is statistically insignificant, as it’s based on a household survey with a margin for error of at least two tenths of a percentage point.
The jobs number, subject to heavy revisions, is based on a survey of employers and is more closely watched by economists and business analysts. It shows growing strength. With upward revisions to the September and August numbers, average monthly gains have been at 170,000 since August, enough to start bringing down the unemployment rate, though slowly.
Private-sector gains were 184,000 in October, another strong sign, and manufacturing hiring was up slightly up after showing some weakness in recent months. In the household survey, 410,000 more people said they’re working and 170,000 more people said they’re unemployed, which leaves the jobless total barely changed at 12.3 million. Importantly, the number who said they’re working part-time but would rather work full-time fell by 269,000 after rising sharply in September.
As predicted below, the edge here goes to Obama, and with key states such as Ohio showing lower unemployment rates than the nation, his supporters will exaggerate the importance of today’s report. See below for my broader thoughts on where this is going.
ORIGINAL REPORT, 1 a.m. Friday:
The last jobs report of Obama’s first term comes in at 8:30 a.m. sharp on Friday, and on one thing, the left and right agree: Its importance will be exaggerated by one side or the other.
Economists surveyed by Thomson Reuters say the report will show the unemployment rate rose to 7.9 percent in October, from 7.8 percent, simply because the drop over the last two months was too large to believe. In job creation, the consensus says 125,000 for the month, higher than last month’s 114,000 but still only tepid.
I am guessing a hold-steady 7.8 percent and 160,000 added jobs, which would help Obama, but the difference means absolutely nothing, as former Labor Secretary Robert Reich pointed out in the Christian Science Monitor. And in the Wall Street Journal, columnist Spencer Jakab made a similar point — any one month’s figures are not very telling.
What we know without seeing the report is that the U.S. economy is improving, but too slowly to make much of a dent in the 12.1 million Americans who want work and can’t find it, or the 8.6 million part-timers who want full-time jobs.
Looking past today’s jobs report, Romney says the deficit is killing jobs, and that tax cuts would add jobs, but that’s illogical on two fronts. A deficit only hurts the economy when it has to be paid for, either in inflation or rising interest rates or higher taxes or cuts in government payments and services. None of those things has happened yet. As for tax cuts, they can help by spurring spending by companies and consumers, but there’s already a lot of cash sitting on the sidelines as it is now, so why would more cash spur more hiring?
The deficits are overwhelmingly the result of low tax collection rates in a slow economy, combined with spending to spur growth. Obama believes the old Keynesian practice — boosting government spending on borrowed money – can make up for private spending to support growth in downturns. Romney says that only spooks private investment by dousing long-term business confidence.
What’s needed is an intelligent balance of public and private investment aimed laser-like at increasing productivity, and a national ethic — not a government program, an ethic — that shares the benefits of rising productivity more widely. That, unfortunately, would require a higher level of political discourse than the noise we’ll hear Friday after the jobs report comes out, and over the next four days.
AFP/Getty Images
It’s almost enough to make us wish for a crisis, maybe a storm, that would unite the nation to rebuild. We’d never hope for that much pain, of course, even if it did give us photos of Obama and Christie as brothers.
Could unified rebuilding happen without a boatload of human suffering first? No, and that’s why empires decline.
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10 Responses to The Real Challenge In Friday’s Jobs Report
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Dan,
If the desired result is jobs, then consider, in your suggested soution, that one result of raising productivity (greater output per individual) is the need for fewer employees.
Be sure and look at the unadjusted private sector employment numbers and compare to the last three months. employment numbers are real and generally tell you more about the economy then the unemployment numbers! Adjusted numbers reflect history and don’t tell you much about what you are actually seeing.
I’m keenly aware that productivity gains can drive unemployment, but they drive wealth more than they reduce the need for workers. For most of US history, it was not a problem. But that’s why I added in the same sentence that the ethic of sharing the benefits has to change.
If investment doesn’t improve productivity, we’re sunk. If productivity gains don’t drive enough growth to boost hiring, we’re sunk. We will get to the point where the Chinese are making jet engines and designing electronics, giving us little room to move up the scale — and then, to repeat, the empire will decline.
Okay; I didn’t get past the first part and agree with you that there needs to be discussion focused on a more equitable (although, not equal) sharing of income. The discussion (ethics and all) has to happen and the timing might be right. Although, many people and families are comfortable and secure, it has become painfully obvious to most citizens that the nation, as a whole, has very serious problems that need to be solved. I believe that, if provided with a way to become more knowledgeable and better informed, a greater number of citizens would participate in the process. Current communications technology can help accomplish this but it will require leadership and direction to put these tools to good use. It remains to be seen, where that leadership will come from.
Total unadjusted private employment down in September.
August 112,366,000 September 111,989,000 Statistically that’s no change.
Unadjusted totals can’t be compared month to month, though you’re right that they give a good view of what’s really happening. There’s a reason they have seasonal adjustments — different things happen in different months, like college students going back to school and retailers hiring for Christmas.
We sadly forget the number of people who have fallen off the unemployment rolls, count them and we’re probably closer to double-digit unemployed. I heard a stat recently, can’t remember source so take it for what it is worth: for every job filled, 47 people are going on food stamps.
In July 2012 the number of US households reliant on foodstamps rose by 99,493. Assuming 2 persons per household this equals 198,986 more people. In the same month 181,000 people got jobs. So the ratio is around 1 to 1. Certainly not 47 to 1.
http://www.zerohedge.com/news/2012-10-05/us-foodstamp-usage-rises-new-record-high
When I listen to criticism of 47% or whatever % of people being on food stamps – an increase under Obama, I realize that there is a price to pay for our system that has been ruled by corporations who want continued lower taxes, to offer lower wages to its workers, off shoring jobs in order to save more billions. All the while stashing away trillions of dollars. And these very people and their naive supporters have no sense of decency to feel a need to help alleviate conditions brought on by their own style of greed.
Hopefully, Obama’s 2nd term will be even more productive then his first term. He will need to get out of the house more in the evening to push his agenda forward.
You may call passing another behemoth entitlement, racking up $5T in debt, campaigning for 2 years, and partying with entertainers productive. I call it an unmitigated disaster and disgrace. Four more years of Obama and we might as well be Greece.