It's a 'jobs and the economy' election, and here's some breaking 'jobs and the economy' news:
Weekly applications for U.S. unemployment benefits jumped 46,000 last week to a seasonally adjusted 388,000, the highest in four months. The increase represents a rebound from the previous week's sharp drop. Both swings were largely due to technical factors. Last week, California reported a large drop in applications, pushing down the overall figure to the lowest since February 2008. This week, it reported a significant increase as it processed applications delayed from the previous week. Applications are a proxy for layoffs. When they decline, it suggests hiring is improving. The prior week's figure was revised up to show 3,000 more applications than previously reported to 342,000...The economy is not growing fast enough to generate much hiring. Growth slowed to a tepid annual rate of 1.3 percent in the April-June quarter, down from 2 percent in the previous quarter. Most economists see growth staying at or below 2 percent in the second half of the year.
This spike is anything but unexpected, given last week's data wrinkle, in which one state's failure to report (California) artificially held the weekly claims number down. Earlier in the week, a report surfaced that the Obama campaign is starting to fret over the October jobs report, which will be published the Friday before the election. They're concerned that the unemployment rate will tick back up just days before tens of millions of Americans cast ballots:
“Of course we’re worried about it,” admitted an Obama campaign aide, on the prospect of an eleventh hour jobs report showing a spike in the unemployment rate. “But thankfully a large portion of the country will have voted by then.” Indeed, a higher figure is not just possible; many on both sides see it as likely. “The unemployment rate in the next jobs report will likely be higher than 7.8,” said American Enterprise Institute economist Michael Strain. “Whether that is 7.9, 8.0, 8.1, I don’t know.”
Yes, many Americans will have already voted by November 2, but early voters tend to be high-information, motivated partisans. The large majority of people will show up on election day itself, including a vast swath of low-information, 'gut feeling' voters. A bad jobs report being fresh in the news certainly won't help matters for the incumbent. To some extent, the Obama campaign is right, however: Obsessing over any single month of data isn't especially enlightening. Broader trends are more important, such as the slowing GDP growth rate, and disheartening projections like this:
A new survey of economists suggests unemployment is likely to remain right where it is over the next year, stalling at the current level of 7.8 percent through the fourth quarter of 2013. The widely watched National Association for Business Economics Outlook, a survey of 44 professional forecasters, says job growth next year is expected to average 155,000 per month, a modest figure that barely keeps pace with population growth and will not significantly impact unemployment. The Outlook expects GDP growth to rise a paltry 1.9 percent this year and only 2.4 percent next year, with levels approaching normal – albeit unremarkable – growth of 3 percent only by the end of 2013. The forecasters expect little change in the federal deficit, saying it will remain close to the $1 trillion mark at $950 billion in 2013.
Barack Obama's plan to jump-start the economy over the last four years has failed by the administration's own measures. His sweeping second term agenda? Raise taxes on small businesses and hire more teachers. That'll do the trick. And his "balanced" deficit math doesn't add up. Four more years?
UPDATE- Here's a former Obama appointee (!) on MSNBC (!!) putting Obama's dreadful economic record into context:
But all is well, says Jay Carney.