With the monthly jobs report for October — the last before the presidential election — due on Friday, there are signs that President Barack Obama’s team is lowering expectations. Over at Hot Air, Ed Morrissey notes an exchange between George Stephanopoulos and Austan Goolsbee, a former chief economic adviser to President Obama, that took place on Sunday (emphasis mine):
NRO’s Eliana Johnson picked up on an interesting moment during yesterday’s This Week on ABC. George Stephanopoulos asked former Obama administration economist Austan Goolsbee about the political impact of the jobs report coming up this Friday, just four days before most voters cast their ballots. Goolsbee notes that only “unbelievable outliers … crack through the shell” of the electorate’s consciousness for a single-month’s report. Goolsbee then admits that last month’s jobs report was “artificially too optimistic” — an “unbelievable outlier,” in other words.
So why admit that now? Well, that “unbelievable outlier” is likely to get corrected in this month’s household survey, and that will drive the jobless rate up. Goolsbee argues, in other words, that a jump in the jobless rate won’t impact voter psyche because voters already know the economy is improving regardless of these “unbelievable outliers”
On Friday, the Bureau of Labor Statistics released the jobs report from September, showing 114,000 jobs created and the unemployment rate dropping to 7.8% (U-3 rate) — the first time it’s been under 8% since January 2009. The U-6, what many call the true measure of unemployment, is still stuck at 14.7%.
Via James Pethokoukis, here is an updated look at unemployment where the White House said it would be compared to today’s reality:
On its face, the report is very good news for President Barack Obama, who has been dogged by weak jobs numbers during this so-called “economic recovery.” However, the details of the September jobs report habe a lot Republicans questioning how the unemployment rate could fall when only 114,000 jobs were created — which is still below the number needed to keep up with population growth.
Despite the conspiracy theories about the BLS cooking the books, the Wall Street Journal explains why the unemployment rate dropped:
While it seems that President Barack Obama may have received a bump in support thanks to some firey speeches at the Democratic National Convention last week, the gains may be short-lived thanks to yet another dismal jobs report. On Friday, the Bureau of Labor Statistics (BLS) reported that 96,000 jobs were created in August, though the unemployment rate did fall, that is thanks to some 368,000 people leaving the labor market.
President Obama and Democrats are trying to put the best spin they can on the report, oftening claiming that 4.5 million private-sector jobs have been created since January 2010, which is a dubious claim since the net gain is closer to 300,000 since he took office. But it’s hard to look at the numbers and deny just how poorly the economy is functioning in what is supposed to be a recovery. James Pethokoukis noted a key point, outside of the job creation numbers and unemployment rate, is average hourly earnings from the private-sector. As you can see, the numbers so a continuing downward trend, even three years after the recession ended:
There is a reason that Democrats are focusing on just about any issue other than the economy. Despite promises that the unemployment rate would be 5.6% today with the passage of the 2009 stimulus bill, it’s actually at 8.3%. Many have pulled out of the labor market entirely and economic forecasts are constantly being revised downward.
With all of that, it’s odd that anyone from President Barack Obama’s campaign would claim that they’ve been good on jobs. It’s even more odd that Stephanie Cutter, a spokewoman for Obama’s campaign, would say that the current recovery is better than that of Ronald Reagan (emphasis mine):
Well, I think that worker probably has a good understanding of what’s happened over the past four years in terms of the president coming in and seeing 800,000 jobs lost on the day that the president was being sworn in, and seeing the president moving pretty quickly to stem the losses, to turn the economy around, and over the past, you know, 27 months we’ve created 4.5 million private sector jobs. That’s more jobs than in the Bush recovery, in the Reagan recovery, there’s obviously more we need to do, and as I said to Mika at the at beginning of the program, I think that unemployed worker probably sees one person in this race trying to move the country forward and that’s the president.
While we have gotten off on another distraction thanks to Todd Akin’s comments about abortion and rape, swing state voters may wish the national focus of the election was back on the economy. According to recent jobs numbers, the unemployment rate went up in 44 states, including many that will play a factor in determining the presidential race:
The jobless rate climbed in July in nine of 10 battleground states that could play a pivotal role in the presidential election, even though employers added workers in most of them.
The unemployment rates rose in Iowa, Florida, Michigan, Nevada, New Hampshire, Pennsylvania, and Virginia, according to Labor Department data released Friday. The rate also increased very slightly, in Colorado and North Carolina, and held steady in Ohio, ending 11 months of declines there, the data show.
Nevada’s 12% unemployment was highest among all 50 states. Michigan’s rate hit 9% for the first time since January, and Florida’s rate, now at 8.8%, increased for the first time in more than a year.
The state figures largely tracked the national jobless rate, which ticked up to 8.3% in July from 8.2% in June.
Separately, Gallup notes that 56% of voters in swing states say they are not better off than they were four years ago. Only 40% say they are better off. The number of voters who say they aren’t better off is up slightly from when the same question was asked back in January. Who do they blame? Twenty percent point their finger at President Barack Obama, while only 7% blame his predecessor, George W. Bush.
The jobs report from July has been met with familar rhetoric from both sides. Republicans, highlighting the fact that this is the 42nd consecutive month with an unemployment rate of 8% or higher, used it as evidence that President Barack Obama’s economic policies are a failure. Democrats pointed to the gains in employment and again urged Americans not to read too much into the lagging job creation.
So who are we supposed to believe? The basics of the jobs report are pretty straightforward. There were 163,000 jobs created in July, which is slightly higher than the number needed to keep up with population growth. However, 150,000 workers left the workforce. Mish Shedlock notes that “those ‘not’ in the labor force rose by 2,027,000” in the last year, which is a concerning number. Shedlock points out that “[w]ere it not for people dropping out of the labor force, the unemployment rate would be well over 11%.”
If that number isn’t overwhelming enough, the Hamilton Project estimates that, given current job growth trends, unemployment will not fall to pre-recession levels until 2025:
It’s that time of the month again. Everyone closely following the presidential election is closely looking at the Bureau of Labor Statistics’ monthly jobs report. According to the BLS, the economy added a net of 163,000 jobs in July, but the unemployment ticked up to 8.3%.
The good news for President Barack Obama is that the report beat the 100,000 consensus estimate from observers. The +163,000 does, though just barely, surpass the number of +125,000 to +150,000 needed just to keep up with population growth. The bad news is that some 150,000 workers left the labor force last month, the U-6 employment increased to 15%, and the numbers for June were revised downward, from +80,000 to +64,000. Also, the number of unemployed increased by 45,000 in July.
Basically, the hard number of jobs created last month is good for Obama. But the fact that unemployment is still over 8% for the 42nd straight month is a point that is going to be hammered home by Mitt Romney and Republicans.
James Pethokoukis, an economist at the American Enterprise Institute, notes that unemployment would 11% if the labor force participation were at the same size as when Obama took office. He also points out that “[i]If labor force participation rate hadn’t declined since just last month, unemployment rate would have risen to 8.4% [in July].”
There are three more jobs reports to go between now and the election in November. Things have to get better than this if Obama hopes to be re-elected.
Image courtesy of the American Enterprise Institute
Polls may show him in a tight race with Mitt Romney, but a new survey from The Hill doesn’t paints a less than flattering picture of how voters view the “change” President Barack Obama has brought. According to the poll, a majority of Americans believe that Obama has changed the country for the worse:
Two-thirds of likely voters say President Obama has kept his 2008 campaign promise to change America — but it’s changed for the worse, according to a sizable majority.
A new poll for The Hill found 56 percent of likely voters believe Obama’s first term has transformed the nation in a negative way, compared to 35 percent who believe the country has changed for the better under his leadership.
The results signal broad voter unease with the direction the nation has taken under Obama’s leadership and present a major challenge for the incumbent Democrat as he seeks reelection this fall.
It found 68 percent of likely voters — regardless of whether they approve or disapprove of Obama — believe the president has substantially transformed the country since his 2009 inauguration.
People are not happy with the current situation in the country (with good reason) and for the most part think 4 years is enough time to change it if a president is capable of doing so. It hasn’t happened. In fact, for at least 14.9% of the working population it has gotten worse (as reflected in the U6 unemployment/underemployment number).
That’s a huge number.
It has been difficult for the Obama Administration to spin Friday’s jobs report. Analysts were predicting that they economy would create up to 100,000, but the numbers reported by the Bureau of Labor Statistics showed that only 80,000 jobs were created in June; far below the 120,000 to 150,000 needed each month just to keep up with population growth.
Even though the report was a less than encouraging sign that the economy is recovering, leave it to Rep. Debbie Wasserman Schultz to try to put a happy face on such pathetic numbers:
Americans for Prosperity (AFP), a DC-based grassroots conservative group, has released a new ad knocking President Barack Obama for his recent comments declaring that the “private sector is doing fine.” The ad points out that Americans have seen an unemployment rate over 8% for 40 consecutive months with 12.7 million Americans currently unemployed and that the natonal debt has now exceeded $15 trillion.
Noting that Obama is out of touch with Americans, AFP asks, “How can [Obama] fix the economy if he doesn’t know what’s wrong?” At the end of the ad, AFP promotes their “Jobs Agenda,” policy proposals that would jump start the economy: