November 1, 2012

“Back to 8%? | Why the October unemployment rate might be a November surprise”

Jim Pethokoukis:

There’s little time left in the 2012 presidential campaign for a momentum-shifting “game changer.” But tomorrow’s job report might be just such an event. The major — and somewhat mysterious — drop in the unemployment rate last month, to 7.8% from 8.1%, gave a much-needed political boost to the Obama campaign. On the surface, it showed a labor market suddenly gaining Wolverinesque healing abilities. It also stripped GOPers of great talking point.

But what if the data tomorrow show the September number to be an anomaly? It could happen, says Stephen Oliner, an AEI economist and former Federal Reserve senior adviser:

Payroll employment likely continued to grow slowly in October, posting a gain of about 125,000. In the separate survey of households, I expect the puzzling surge in employment that was reported last month to be followed by a decline in October. Similarly, I anticipate that the unemployment rate will move back up to 8 percent after the surprising drop in September. Overall, the report will portray a labor market that remains weak.

Washington watchers like Greg Valliere of Potomac Research, for instance, think such a result would boost Team Romney. As Valliere put it in a research note this mornning, “But momentum is fickle, and it could shift once again after release of tomorrow’s unemployment data. …  A weak number could give Romney a boost in the campaign’s final weekend.”

The consensus, according to a survey by Reuters, is for gains of 125,000 with an unemployment rate of 7.9%. So Oliner’s forecast is right in the zone. Given a) slow GDP growth and b) the chill in business investment and confidence, an employment surge would be a shocker.

But keep in mind that job gains of 125,000 or 150,000 or even 175,000 do little if nothing to close the 13 million job gap between where where employment should be and where it is. We are only getting trend jobs growth, just enough to deal with population growth –but not enough to close the yawning chasm. The Long Recession grinds on.

Okay, wait.  Did I miss something?  Has the completely finessed and massaged and statistically improbable 7.8% rate from last month become a kind of established truth now?  And why would anyone on the right let that happen?

My prediction:  there’s no way in hell Labor lets that number go up over 7.9%.  If they do, that’s an admission that even they are tired of covering for this guy and his corrupt Administration, and it’s time for him to go.

There.  That’s me being provocative.

Posted by Jeff G. @ 10:26am

Comments (10)

  1. Are we getting the report tomorrow, or are they going with the Sandy ruse?

  2. They’ve said they’re releasing the numbers on schedule. By whih I assume they mean, “Fine, you want them on time, we’ll give you numbers pulled out of our asses, and you’re fucking welcome.”

  3. My guess is that the race is frozen where it is and nothing short of a Romney had sex with a goat and then paid for the abortion is going to shake it loose.

  4. – With Septembers reset of new jobs down from 144,000 to 86,000, and Cal’s numbers making it to the CBO on time, they’ll need to issue tomorrows rate from Dreamworks in Commiewood to say its 7.8% again.

  5. – In other news…..

    “State department to review State department Benghazt review.”

    “Obama’s own jobs council endorses Romney

    “Two-thirds of new jobs go to immigrants during Obama administration.”

    Leno: “Hurricane Sandy has already generated more jobs than Obama.”

  6. I’m more interested in the January unemployment numbers.

  7. – I wouldm’t have pegged you for the fairytale kind McGehee.

    – More glee in paradise.

  8. – The investment groups may wait a bit to see how Romneys going to actually govern. A few more months as far as they’re concerned doesn’t make much difference after 4+ years.

  9. Well BBH, I’ll be looking for two names in particular.

  10. – I hear yah. I just don’t expect the gov to ever report the truth on unemployment. Too many city halls are fire traps.

    – And now for some sports….”Don’t let the ball hit you in the ass on the way out.”