The Real October Jobs Report
Conservative Republicans speculated that if the news were bad the report would be delayed until after the election, but if the news were good it would be released on time.
This month’s jobs report was released on time. The news outwardly looks very good for the President.
This report will be trumpeted by President Obama in the remaining days before the election as a triumph of his economic policies. He will likely claim 5.0 million or more jobs created. Romney will be put on the defensive by the mainstream media.
A closer look at the report, though, shows all is not as rosy as it seems.
Obama’s Conveniently Timed Good News
The most important number for the President in this month’s jobs report will be +184,000.
That is the growth in total private-sector jobs last month. Even better yet, both September and August total private-sector job growth numbers were revised UPWARDS by the BLS this month… by +61,000 and +37,000, respectively. That boosts overall private-sector job growth even more.
Throughout the campaign, President Obama has always used total private-sector job growth as the yardstick for his economic accomplishments. He certainly won’t change now.
The official monthly report says there were +171,000 jobs created last month. It is lower than private-sector job growth because there were -13,000 more jobs lost in the public-sector. The best news in public-sector jobs is that local public employment remained steady and did not drop last month.
The President always uses private-sector job growth as his barometer of success in order to avoid admitting that there have been -664,000 public sector jobs lost since he became President.
By the Numbers
There is a lot of good news reported in this month’s jobs report.
From the household survey, total employment grew by +410,000; the labor participation rate jumped 0.2% to 63.8%; the employment population ratio increased 0.1% to 58.8%; and the U6 unemployment rate dropped 0.1% to 14.6%.
The U6 rate of unemployment and underemployment due to economic conditions is far from good, but it is down from 16% a year ago. The other two bad ratios are also down from a year ago.
From the establishment survey, it is of interest to note that both total private-sector and total nonfarm employment figures were historically revise upward for both September and August. The bodes well for the President’s reelection.
The total nonfarm employment figures are especially impressive. September was revised upward +255,000 and August revised upward +50,000.
Everything is coming up roses for the Administration.
The Dark lining on the Silver Cloud
The first hint of trouble is what the BLS reported as an “essentially unchanged” unemployment rate of 7.9%. The unemployment rate rose a scant 0.1% from the 7.8% reported last month.
With all the great news, why didn’t the unemployment rate drop as would be expected??
Here are two ominous reasons:
- -369,000 workers dropped out of the workforce altogether
- +170,000 more workers are unemployed this month than last
Though they speak volumes as to the state of the economy, those numbers probably will not get much mention in the final days of this election cycle.
This month’s jobs report will be touted in the press as good news for President Obama.
Coupled with Presidential official announcements and campaign speeches it will probably increase confidence among undecided voters that President Obama’s economic policies might finally be starting to work.
The bad news will be swept under the rug again this month and that just may give the President the edge he needs to win on Tuesday.
But Wall Street is not fooled. After an initial jump in the Dow of +25, it has fallen off -41 points from its opening as this writing. Wall street’s number crunchers are absorbing the full jobs report.
This one jobs report will not change the minds of many undecided voters. But as razor close as this election is, it just may be enough to sway the outcome one way or the other.