New jobs report offers a last word on economy before election
Depending on political spins and eventual revisions, the final Bureau of Labor Statistics jobs report before the presidential election, could be good or bad for whoever wins.
U.S. employers added 171,000 jobs in October. The job gains were better than expected, and better than the economy was producing in the spring and early summer of 2012.
Unemployment inched up by 0.1 percent to 7.9 percent. Many economists put a positive spin on the increase, since it reflected more people entering the workforce, apparently encouraged that they could actually land one of those 171,000 new jobs. The unemployment rate held below the politically significant 8.0 percent level. Unemployment soared above that level in President Obama’s first full month in office, and has remained there until falling to 7.8 percent in September 2012.
The Bureau of Labor Statistics also revised job-creation figures upward for August and September, concluding that 84,000 more jobs were added than previously estimated.
The BLS calculates the number of jobs added or subtracted from the economy each month based on a survey sent to 140,000 businesses nationwide. All told, they represent roughly one third of all American non-farm employees. The survey asks about payroll, wages and hours.
But not all those businesses send the paperwork back on time. Their pay period, for instance, might not coincide with the reporting period used by the BLS. So, as BLS staff economist Angela Clinton explains, the BLS projects what the full sample will ultimately show, based on complicated mathematical formulae, and then adjusts its figures in subsequent months as more employer survey data comes in. BLS economists also include seasonal adjustments to smooth out the numbers. Ninety-five percent of participating surveyed businesses ultimately report for a typical month. In October, approximately 70 percent had reported by the time the BLS’s preliminary report was compiled.
Eventually, the monthly job-creation numbers catch up with the hiring and firing that employers are actually doing in the economy. It just takes a while.
The job market has been improving since early summer. And the U.S. economy has been adding more jobs than first thought, says Nigel Gault at IHS Global Insight: “171,000 jobs this month, and we now have an average of 170,000 over the past three months -- that’s better than we’ve been used to seeing.”
At this point in the 2012 election cycle, the trend is helping President Obama, says Princeton historian of American politics, Julian Zelizer.
“I think if President Obama is reelected, and the economy really does take off, he certainly will get credit,” says Zelizer. “Then it becomes a story of his presidency: a tough first term, doing what was needed, and finally his policies take hold in term two.”
Zelizer says if the Republican candidate Mitt Romney wins the White House, “The credit will fall to Romney. He would be the president who orchestrated the recovery that was impossible when the Democrat was in the White House.”
Of course, recent job gains could be a fake-out. If the nascent recovery stalls yet again, then whoever wins the White House will face a lot of hurt for an economy that’s still not putting America back to work.