Tag Archives: jobs

Today’s Jobs Report Unlikely to Change Election Trajectory

In August, I wrote the following regarding the monthly jobs reports:

Not much to see here. Really. The full takeaway is an improved report compared to the poor prior months but there is softness underneath the top-line results in a continuing weak economy. Regarding political implications, due to the current weak state in the economy, this jobs report and the next three before the election will only confirm preconceived views on the economy and/or the President absent a breakout report (high or low) above 200-250k or below 0.

Today’s non-farm payrolls number was 177k jobs added but the unemployment rate rode to 7.9%.  Republicans will spin that the unemployment rate is higher than when Obama took office and even worse if you factor in those who dropped out of the workforce.  Democrats will spin the recovery continues apace, albeit slow. Bottom line: jobs, economics, recovery all all fully baked into the cake. At this late juncture voter enthusiasm, turnout and avoiding a meltdown (Bush DUI, Benghazi?) are likely the only things that will affect Tuesday’s results.

Here are some smart takes on the jobs report:

It’s hard to write about this report and not have it seen through a political prism, and, yes, these numbers were pretty good, but the difference between 125,000 jobs added and 171,000 added, in a work force of 155 million someodd people, is statistically insignificant. What matters are wages. Our David Wessel just pointed out that over the past year, wages are up 1.6%, consumer prices are up 2%. — Paul Vigna, Wall Street Journal

September payrolls were revised to a gain of 148,000 from an initially reported 114,000, and August to 192,000 from 142,000. The U6, which is a broader measure of unemployment including job seekers as well as those stuck in part-time jobs, fell one-tenth of a percentage point to 14.6% in October. — Steven Russolillo

“Not Fixed”

The Choice on Jobs

Obama Fails to Change the Trajectory of the Race

Normally I like to use Mark Halperin’s write-up because I really respect his work and appreciate the way he smartly puts things on paper even when it is something I don’t want to hear.  His grades for the debate were B- for Obama and C for Romney.  I can live with those grades but I thought his write-up was pretty weak.  He makes a couple good points as you’d expect but his wording and phrasing was overwhelming negative towards Romney.  If you read only the reviews and not he grades you would think he gave Obama a B and Romney a D-.  In light of the fact that his B- grade is the exact same grade he game Obama after the disastrous Denver Debate,  I  have to grudgingly admit this was a poor effort on his part — especially the near hyperbolic words and phrases he uses to describe troubles for Mitt Romney.

One of the better discussions of the debate in my opinion was by Ari Fleisher on CNN who talked about the debate in baseball terms with each debate accounting for 3 innings of a 9 inning game. The blowout first debate for Romney was like a team scoring 5 runs in the first three innings.  I agree wholeheartedly with that assessment which is backed up by every poll, in enthusiastic fundraising numbers as well as through the post-debate despondency on the Left.  So after debate 1 we are looking at a score of Romney 5 Obama 0.

For the second debate with most people scoring it a draw Fleischer said that would be a 0 to 0 outcome over those three innings.  He then conceded you might give Obama 1 run to Romney’s 0 based on some of the snap polls.  I would go with the 2nd scoring and grant Obama a run for representing his case strongly as his base would see it — something he did not do in Denver. At the same time Romney did a good job in areas like forcefully distinguishing his prospective Administration from the Bush years, consistently articulating his focus on job creation as well as remaining appropriately critical of why we should move on from Obama.

Romney didn’t score though because of his fumbling the Libya opportunity.  If he was going to land a knockout blow, that was his opening and it was right there for the taking. We can criticize Candy Crowley for inappropriately interjecting herself there but Romney was already fumbling before she made even more of a mess in that situation.  The facts and severity of the situation in Libya will ultimately overwhelm any debate fallout from the missed opportunity but if Romney were going to add to his momentum and put some runs on this board, this was his moment and he missed it.  It doesn’t set him back but it does keep him from extending the lead.

So I’ll score the second debate Romney 0 Obama 1. If someone wants to make the argument that Obama won this debate to balance out Romney winning the first debate, that may be technically accurate but the two debates were materially different in terms of voter impact.   In our baseball analogy, after 6 innings, the score is Romney 5 Obama 1. Romney still has momentum and growing voter support even if he didn’t augment it in this debate.  You saw this is those same post-debate snap polls where voters overwhelming supported Mitt Romney on issues of the economy, jobs and the deficit.  This is materially important because every Battleground State or National poll says those issues are paramount to a super majorities of voters and Mitt Romney continues to be the run away leader on those issues.  Barack Obama’s inability to move those numbers are why, despite his improved performance, he most likely did not persuade the voters he needs to get over 50% in the polls or dissuade the Romney voters he needs to stay home.

Both candidates came out combative and ready for the fight.  The problem for Barack Obama is the public is ready to replace him as President evidenced by the stubborn consistency of his polling always around 47% support (that is below the necessary 50% threshold). The public saw a Mitt Romney in the first debate who they deemed plausible as President and nothing in this debate did anything to disabuse them of that notion.

State of the Race — Mark Halperin

Between the volatility in the polls and the ever changing campaign themes (at least from the Obama camp), it is sometimes easy to get lost in the weeds.  Mark Halperin takes a step back and identifies the fundamentals that should continue to drive this race through election day (or at least the next debate):

One, Romney’s campaign trail performance is without a doubt better than it was before, but it is also getting more attention and being given gentler reviews by voters and the Gang of 500. As long as the Republican is on a roll, even the Old Romney will be seen through new, more forgiving eyes.

This is both the bandwagon effect (everyone likes a winner) plus a tacit admission the media were covering Romney unfairly prior to his debate performance.  The media will want access to a Romney Administration so they need to curry favor and cover for their all-out advocacy over the prior months.

Two, the message discipline reversal continues. Romney is running on a theme he can sustain through Election Day (“we can’t afford four more years of Obama”), while Chicago has switched from “Romney is an extremist” to “Romney is a liar who hates Big Bird.” The Obama campaign has some sorting out to do on this, especially in the eyes of the Gang, and, perhaps, with voters.

This is a big deal.  The Obama campaign has no second term agenda that even their staunchest advocates in the media reluctantly concede. Ever since the disastrous first debate performance their campaign and messaging has been floundering while the Romney campaign has sprouted wings. Even today’s juxtaposed Sesame Street ads speak to a substance-less Obama message versus a wonderful jiujitsu reversal to substantive issues like Syria and jobs in the Sesame Street/RNC graphic.

Third, momentum and confidence matter a lot in politics. Until at least the next debate on October 16, Romney and his forces are likely to have more of both, barring some huge intervening event.

This is a cautionary warning to the Romney campaign that folds into the prior point of message discipline. The Romney campaign in the primaries and even during the general election had an uncanny ability to steal its own thunder when events and momentum were on its side.  Coming out of the debate the campaign has achieved the opposite by augmenting their advantages most notably with Romney opening up about the incredible and poignant service he has done in his community for many years with no fanfare.  Absent Europe collapsing (still possible) or another terrorist attack the current framing and construct of the campaign should last until the next Presidential debate — sorry Paul, the VP debate doesn’t matter, just ask President Dukakis.

Fourth, while the horserace poll numbers are eye-catching, watch to see if there is Romney improvement on “cares about people like me” questions and on “has better ideas on the economy and jobs.” Those are among the most critical areas.

There’s more to the empathy issue than meets the eye. While economy and jobs are the overriding principles of this election, we’re down a single percent of Undecided/persuadable voters.  And when they are in the voting booth they need to “feel” comfortable with Mitt Romney.  He’ll never come close to passing President Obama in this category ahead of the election but it would hugely valuable if this softer-side metric continued to rise as the public sees the different side of Romney evidenced by the personal stories he shares.

Fifth, and most important, the President still has an advantage in the Electoral College, both in the individual battlegrounds and in terms of more paths to 270. Whatever progress Romney has made in the wake of Denver, he hasn’t eliminated the Obama edge there, and, obviously, nothing else really matters.

This is the reality of incumbency and what ever more looks like a the 50/50 electorate we had in 2000 and 2004. Obama’s support may be soft underneath in any number of states, but he does have a base support that gets him all the way to 47% no matter how you slice the electorate. It only takes a small amount more to put him over the top.

Jobs Report Shows Pockets of Strength — Unlikely to Change Election Dynamic

Bottom line (from two months ago) still applies today:

Not much to see here. Really. The full takeaway is an improved report compared to the poor prior months but there is softness underneath the top-line results in a continuing weak economy. Regarding political implications, due to the current weak state in the economy, this jobs report and the next three before the election will only confirm preconceived views on the economy and/or the President absent a breakout report (high or low) above 200-250k or below 0.

The US economy added 114,000 jobs in September, and the unemployment rate dropped to 7.8%. Rather than participate in conspiracy theories (Jack Welch should be ashamed of himself), let’s look at the reality of this jobs report.

Remember, there are 2 surveys here

The payroll numbers and unemployment figures are obtained by separate surveys—they sometimes diverge in the short-term but generally move in the same direction. The unemployment rate is obtained in a survey of households, which tends to be more variable because of a smaller sample size. Previously, changes in the rate have reflected people dropping out of the work force. That wasn’t the case in September.

Household survey versus non-farm payrolls

The volatile Household survey which had a couple bad months prior to this survey caught up in a big way this month.  That is not an unusual phenomenon for that labor component.  873,000 people in the Household survey claiming they have found jobs. This is the largest increase since 2003. That is very good news but it must be tempered by the volatile nature of the survey and the tepid non-farms payrolls report that sputtered along at +114k new jobs, consistent with recent results.

Same amount of people looking for work

Regardless of statistical jumps from accounting issues in the unemployment rate (not fudging, but also not accurate) the drop in unemployment to 7.8% is good for optics but no gain in real world. The Labor force participation rate — the share of people looking for work or working — was little changed at 63.6%.

Jim Baird, Chief Investment Strategist for Plante Moran Financial Advisors, sums it up nicely:

All things considered, today’s report is a modest surprise and the decline in the jobless rate is a positive development for the economy. Nonetheless, the bottom line is that the economy appears to be grinding along at a pace that is universally unsatisfying, and well short of the pace needed to ramp up the still lackluster pace of job creation and promote better household income growth.  There’s no question that the economy remains in a window of vulnerability, with the fiscal cliff looming large on the horizon.

How does this compare in political terms to the re-election campaigns in 1992 and 2004?

Bureau of Labor Statistics; Monthly jobs reports 1992 vs 2004 vs 2012

The graphs are not very distinguishable between these years. Don’t expect too actual political traction to be made by today’s jobs report by either candidate.

“12 Million Jobs”

Right out of the debate prep:

Obama Dismisses Jobs Report of 330k New Jobs Created in One Month

Because it was under George Bush:

 

Turns Out Sarah Palin Was Right

Obama’s Achilles Heel Grows Larger as Unemployment Worsens

All the fancy word in the world won’t change the fact that the employment situation in the United States is horrible. Last night Barack Obama gave an impassioned speech filled with soaring rhetoric that failed to mention even in passing a plan to get America back to work. Pet projects and crony capitalism that have been the hallmark of his Administration were the closest thing he came to when discussing jobs but the occasion job here and there won’t resurrect a nation of 300+ million people. Today’s anemic jobs picture is a stark reminder that 4 years into the Obama Presidency on the #1 issue to most Americans all his soaring rhetoric does is mask the truth he has no plan to turn this economy around:

U.S. job growth slowed in August, signaling a stalling economy that could mute any post-convention momentum for President Barack Obama and spur the Federal Reserve to take further steps to stimulate the economy. Nonfarm employment was up by a seasonally adjusted 96,000 and figures for the previous two months were revised down, the Labor Department said Friday. The report portrayed a sluggish economy that continues to move sideways, leaving few opportunities for the nation’s 12.5 million unemployed.

The unemployment rate—which is politically salient and comes from a separate survey than the jobs data—fell to 8.1% from 8.3%. That was because an estimated 368,000 people gave up looking for work. Throughout this year, the unemployment rate has bounced between 8.1% and 8.3%. Meantime, the labor force participation rate, which is the share of the population that is working or looking for work, fell to its lowest level since 1981.

Searching for good news in the guts of the report, economists found little. The average workweek was flat and July’s figures were revised downward. Average earnings slipped slightly. The weak payroll numbers, taken with other reports that indicate a manufacturing slowdown, suggest growth isn’t picking up and remove a final hurdle standing in the way of the Fed proceeding with new action.

While the U.S. economy has been adding jobs every month since October 2010, the economy—and in particular the labor market—has continuously struggled to hit the kind of velocity needed to bring down the unemployment rate. This is largely because the economy’s legs have never quite moved in unison.

For instance, the factory sector was strong for much of the recovery but the housing market remained weak. Today the housing market is perking up just as the factories shift downward. Manufacturers shed 15,000 jobs in August. This has left the country prone to outside shocks, such as supply disruptions brought on by the Japanese tsunami disaster last year and the current pressures over the European debt crisis.

The Labor Department on Friday said private companies accounted for all of the growth in August payrolls, adding 103,000 jobs during the month. Governments, meanwhile, shed 7,000 positions as state and local governments cut payrolls. In the private sector, employment rose at restaurants and bars, in the professional- and technical-services sector, in health care and in the utilities sector. In another sign of a weak labor market, average earnings ticked down by one cent to $23.52 an hour, while the average workweek was unchanged at 34.4 hours.

A broader measure of unemployment—which includes job seekers as well as those in part-time jobs—fell to 14.7% in August from 15.0% the previous month.

What You Should Know About the Jobs Report

Bottom line:  Not much to see here. Really. The full takeaway is an improved report compared to the poor prior months but there is softness underneath the top-line results in a continuing weak economy. Regarding political implications, due to the current weak state in the economy, this jobs report and the next three before the election will only confirm preconceived views on the economy and/or the President absent a breakout report (high or low) above 200-250k or below 0.

As predicted there is enough in this report for each partisan side to make some nominal hay for their side following this morning’s jobs report.

  • The Obama campaign will tout the micro-gains — an uptick in jobs last month, especially the private sector (up 172k)
  • The Romney campaign will tout the macro-weakness — an uptick in overall unemployment rate to 8.3% which would have been 8.4% if people hadn’t dropped out of the labor force again

They are both right. It is simply a matter of whether you are predisposed to give Obama a pass on the economy or you think the economy can and should do much better. Today’s report has plenty for both sides:

U.S. payrolls increased by a seasonally adjusted 163,000 jobs last month, the Labor Department said Friday, but the unemployment rate, obtained by a separate survey of U.S. households, ticked up one-tenth of a percent to 8.3%. Economists surveyed by Dow Jones Newswires expected a gain of 95,000 in payrolls and an 8.2% jobless rate. The latest payroll numbers are encouraging after three months of weak job creation, but the figures still aren’t enough to lower the unemployment rate, and hiring remains well below the pace set at the start of the year.

June and May payroll numbers were revised with only a small net effect—June payrolls rose 64,000 compared with the initially reported 80,000, and May was up 87,000 versus an earlier estimate of 77,000. The Labor Department Friday said private companies accounted for all of the growth in July payrolls, adding 172,000 jobs during the month. Governments, meanwhile, shed 9,000 positions. The federal work force shrank by 2,000.

Average earnings edged up by two cents to $23.52 an hour, while the average workweek was unchanged at 34.5 hours. A broader measure of unemployment—which includes job seekers as well as those in part-time jobs—rose to 15.0% in July from 14.9% the previous month.

Quick thoughts:

  • Much of the private-sector job improvements were in non-sustainable areas.  The manufacturing gains were due to auto manufacturers simply not shutting their plants like normal (+13k). This means 13,000 jobs were added back into the overall number that really weren’t new jobs created.  Also leisure and hospitality accounted for another +29k — these are waitresses and bartenders (or similar), not exactly the backbone of an economy.
  • This continues to be the longest stretch of 8% or higher unemployment since the Great Depression, 42 straight months.
  • If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.0%.
  • Unemployment for blacks fell from 14.4 percent to 14.1 percent, while the rate for Latinos slid from 11 percent to 10.3 percent. The unemployment rate for teenagers edged higher to 23.8 percent.
  • Average hourly earnings are up 1.7% over the last year, which is actually the same rate as inflation (that’s June12/June11 for inflation since we don’t have July’s price report yet).  Flat real paychecks are better than falling paychecks, but that’s a slow pace of wage growth, consistent with all the slack in the job market.
  • The seasonal adjustments factor is rightly confusing.  Don’t waste your time on it.  Just know that this occurs every month and it is a fudge factor that does shake the credibility of reports. The effect this month was seen in the household survey showing that the actual amount of Americans working dropped by 195,000, with the net job gain resulting primarily from seasonal adjustments in the establishment survey. This means no jobs were actually created, just the seasonal adjustment pushing the released figure into positive territory.
  • Regardless of the noise the seasonal adjustment creates, looking at the macro-trend you see a sputtering economy with weak job growth.

Refresher for the Jobs Report

At 8:30 EDT the monthly non-farm payrolls report will be released for July.  Both sides will spin the results to their partisan purposes but regardless of any one month result, the overall picture is very ugly.  Here is what we wrote last month when the payrolls report showed 80,000 jobs added:

The economy added 80,000 jobs in June, according to today’s monthly report from the Bureau of Labor Statistics, but they weren’t enough to lower the nation’s jobless rate of 8.2 percent. June is the fourth month of flat growth.

There is no way to spin this report as anything other than a really bad report. But within the context of Presidential politics, it is curious to see where Obama rates within the two campaigns this cycle has been compared to: 1992 and 2004.

Any one data point, good or bad, can be dismissed as an anomaly but monthly averages and trends tell a much more fair story. The average monthly jobs created this past quarter was 75k/month. In 1992, the average in the second quarter was 114k while the average in the second quarter of 2004 was 213k.

1992 2004 2012
2Q Jobs Avg: 114k 213k 75k

At the same juncture in each of the comparative election cycles President Obama is dramatically underperforming his peers. What is more troubling for the President is the trend line. Looking at a chart of his year-to-date monthly jobs reports, we see the figures converging downward with 1992 rather than steadily improving (like 2004) or accelerating upward (like 1984).

From this juncture through the election day in 1992 the monthly jobs report averaged 106k jobs gained. The great difference between 1992 and today is the Bush 41 economy was steadily improving from weak and negative jobs reports in the first quarter while the Obama economy is steadily declining from reasonable and comparatively better jobs figures in the first quarter. Also, Bush 41’s first quarter GDP was 4.5% in a year of 3.4% GDP growth. President Obama’s first quarter GDP was 1.9%, his second quarter GDP is expected closer to 1.5% and the full-year GDP is expected remain below 2.0%

Monthly Jobs Results Jan-Jun 1992 versus 2012

The Obama campaign would like to maintain the argument that this election is more similar to 2004 than 1992, but to do so would be to dismiss a great many things. First and foremost, the 2004 election was about national security (remember John Kerry’s convention? Hint: Obama was there). There was little to no discussion about the economy (honestly, does anyone remember a meaningful economic dispute during that campaign?).

Add to the fact that, as shown above, the 2004 jobs picture was dramatically better than the 2012 malaise and you see the Obama hope for a 2004 repeat fades quickly. For the remainder of 2004, the monthly jobs report averaged 169k jobs gained. That level of job growth is still weak, mind you, but far surpasses reasonable expectations for the Obama economy.

But jobs aren’t the only difference. In addition to jobs,GDP in the first quarter of 2004 was 2.7% in a year where annual GDP was 3.5%. As discussed above, Obama’s 2012 GDP almost certainly will not exceed 2.0%.

Following all the recent jobs report, the weak manufacturing report earlier this week signalling domestic economic contraction, and the global economic slowdown, a rapid pick-up in jobs into the election driving a repeat of the 2004 election is simply not in the cards. Unfortunately for the campaign in Chicago, more and more of the economy and re-election prospects for President Obama are looking like a repeat of 1992.

Obama Job Creation Versus Peers — Dead Last

In one chart, the evidence against Obama is overwhelming: Dead Last

4 Governors and a Little Economy

Flooding the zone today in Ohio with the help of Ohio governor John Kasich, former Florida governor Jeb Bush and current Louisiana governor Bobby Jindal, former Massachusetts governor Mitt Romney went on the offensive of a bad economy and poor jobs growth:

Romney stepped up his attacks on President Obama, choosing to go on the offensive by using Obama’s words against him. Romney has seized on Obama’s statement from a Virginia rally — “If you’ve got a business, you didn’t build that. Somebody else made that happen” — to paint Obama as anti-business. “This is the height of foolishness … it shows how out of touch he is with the character of America,” Romney said as the crowd applauded. “It’s one more reason why his policies have failed. It’s one more reason why we have to replace him in November. “This idea of criticizing and attacking success, of demonizing those in all walks of life who have been successful, is something that is so foreign to us that we can’t understand it,” Romney said

Enter Ohio Governor John Kasich

“The Romney campaign and the Kasich campaign have something very much in common,” Kasich (R) said. “You know they spent all their time trying to smear me because I worked in business. You know why they did it, because they have nothing to sell themselves. Now they are releasing one smear attack after another, because Mitt Romney was in business, and they’ve got nothing to sell. So now they’re trying to smear him.” Romney has been tag-teaming with Republican governors in swing states and arguing that policies put in place by conservatives have helped create jobs and rainy day funds in several states — Ohio’s unemployment rate is 7.3 percent, whereas the national rate is 8.2 percent.

GOP governors and jobs

“I was on a bus trip a few weeks ago you may have seen across Ohio, Pennsylvania, Michigan. … I was in Indiana, Wisconsin, and these are the states headed by Republican governors, and you know what? They are doing the right things and it’s making a difference,” Romney said. “It’s time to have the principals of your state here applied in Washington.” A fiery Romney, who said that he hadn’t made a decision about his vice president in the question-and-answer session, suggested that Obama cares more about getting reelected than creating jobs. “In the last six months, he has held 100 fundraisers, and guess how many meetings he has had with his jobs council?” Romney asked. “None. Zero. Zero in the last six months. So it makes it very clear where his priorities are.”

“If you’ve got a business — you didn’t build that”

How can you say Obama is anti-business? Or that he doesn’t know a thing about how jobs are created?

Fuller transcript:

“There are a lot of wealthy, successful Americans who agree with me — because they want to give something back.  They know they didn’t — look, if you’ve been successful, you didn’t get there on your own.  You didn’t get there on your own.  I’m always struck by people who think, well, it must be because I was just so smart.  There are a lot of smart people out there.  It must be because I worked harder than everybody else.  Let me tell you something — there are a whole bunch of hardworking people out there.  (Applause.)… If you were successful, somebody along the line gave you some help.  There was a great teacher somewhere in your life.  Somebody helped to create this unbelievable American system that we have that allowed you to thrive.  Somebody invested in roads and bridges.  If you’ve got a business — you didn’t build that.  Somebody else made that happen.  The Internet didn’t get invented on its own.  Government research created the Internet so that all the companies could make money off the Internet.”

Dwindling Rust Belt Counties Left Wanting

Michael Barone takes a deep-dive into the 33 counties that make up a strong but dwindling Democratic coalition. Obama desperately needs to keep this coalition intact if he is to win Ohio and Pennsylvania and Friday’s jobs report made this effort all the more difficult:

[With expectantly bad unemployment figures being released] Why did the president’s campaign schedule a two-day bus tour of northern Ohio and western Pennsylvania to coincide with the day the unemployment numbers were announced? Sure, Ohio and Pennsylvania are important states politically. They have 18 and 20 electoral votes, and Obama carried them in 2008 with 51 and 54 percent of the votes. [But] current polling shows Obama with only 46 percent in Ohio and 47 percent in Pennsylvania when paired against Mitt Romney.

This was deep blue territory

Obama’s bus tour was aimed at the historically Democratic Rust Belt territory. Since the United Steelworkers, United Auto Workers and United Rubber Workers organized the steel, auto and rubber factories on Pittsburgh, Cleveland, Akron, Youngstown and Toledo, this has been prime Democratic territory. Even in 1984, when Ronald Reagan was winning a 59 to 40 percent landslide, this Rust Belt — 19 counties of northern and eastern Ohio and 14 counties of western Pennsylvania — voted 52 to 47 percent for Walter Mondale. It was 12 points more Democratic than the national average. If these 33 counties had been a single state, they would have cast 19 electoral votes for Mondale, more than doubling the 13 he won from his native Minnesota and the District of Columbia.

Not your daddy’s rust belt

In the years since, the economy of the Rust Belt has changed. The biggest employers in Cleveland and Pittsburgh these days are not steel mills but hospital complexes. There has been considerable outmigration of young people, and from 1980 to 2010, the population of these 33 counties declined by 7 percent, while the national population increased by 36 percent. If they were a single state, they would have 14 electoral votes, down from 19 three decades ago.

Obama feeling its effects

The aging electorate of the Rust Belt remains Democratic, and these counties voted 56 to 42 percent for Barack Obama. But that means that they were only 3 percent more Democratic than the national average. The polling data suggests that Obama is not running as strong in the Rust Belt counties this year. The bus tour was undoubtedly aimed at pushing his numbers up.

Continue reading

Jobs Report Looks More Like 1992 Than 2004

There have been plenty of articles talking about how the Obama campaign is hoping for a repeat of 2004 (close but successful re- election in a recovering economy) but fears a repeat of 1992 (referendum on the incumbent over too slow of recovery). Today’s jobs report from the Bureau of Labor Statistics paints a very gloomy jobs picture in an all-too-slow recovery:

The economy added 80,000 jobs in June, according to today’s monthly report from the Bureau of Labor Statistics, but they weren’t enough to lower the nation’s jobless rate of 8.2 percent. June is the fourth month of flat growth.

There is no way to spin this report as anything other than a really bad report.  But within the context of Presidential politics, it is curious to see where Obama rates within the two campaigns this cycle has been compared to: 1992 and 2004.

Any one data point, good or bad, can be dismissed as an anomaly but monthly averages and trends tell a much more fair story. The average monthly jobs created this past quarter was 75k/month. In 1992, the average in the second quarter was 114k while the average in the second quarter of 2004 was 213k.

1992 2004 2012
2Q  Jobs Avg: 114k 213k 75k

At the same juncture in each of the comparative election cycles President Obama is dramatically underperforming his peers. What is more troubling for the President is the trend line. Looking at a chart of his year-to-date monthly jobs reports, we see the figures converging downward with 1992 rather than steadily improving (like 2004) or accelerating upward (like 1984).

From this juncture through the election day in 1992 the monthly jobs report averaged 106k jobs gained. The great difference between 1992 and today is the Bush 41 economy was steadily improving from weak and negative jobs reports in the first quarter while the Obama economy is steadily declining from reasonable and comparatively better jobs figures in the first quarter. Also, Bush 41’s first quarter GDP was 4.5% in a year of 3.4% GDP growth. President Obama’s first quarter GDP was 1.9%, his second quarter GDP is expected closer to 1.5%  and the full-year GDP is expected remain below 2.0%

Monthly Jobs Results Jan-Jun 1992 versus 2012

The Obama campaign would like to maintain the argument  that this election is more similar to 2004 than 1992, but  to do so would be to dismiss a great many things. First and foremost, the 2004 election was about national security (remember John Kerry’s convention? Hint: Obama was there).  There was little to no discussion about the economy (honestly, does anyone remember a meaningful economic dispute during that campaign?).

Add to the fact that, as shown above, the 2004 jobs picture was dramatically better than the 2012 malaise and you see the Obama hope for a 2004 repeat fades quickly. For the remainder of 2004, the monthly jobs report averaged 169k jobs gained. That level of job growth is still weak, mind you, but far surpasses reasonable expectations for the Obama economy.

But jobs aren’t the only difference. In addition to jobs,GDP in the first quarter of 2004 was 2.7% in a year where annual GDP was 3.5%.  As discussed above, Obama’s 2012 GDP almost certainly  will not exceed 2.0%.

Following all the recent jobs report, the weak manufacturing report earlier this week signalling domestic economic contraction, and the global economic slowdown, a rapid pick-up in jobs into the election driving a repeat of the 2004 election is simply not in the cards.  Unfortunately for the campaign in Chicago, more and more of the economy and re-election prospects for President Obama are looking like a repeat of  1992.

Obama’s “Bus Tour of Broken Promises”

If plagiarism is the sincerest form of flattery, give President Obama credit for jumping on the Mitt Romney bus … tour that is.  Following Romney’s successful Battleground state bus tour, President Obama announced his own 2-day bus tour of Pennsylvania and Ohio.  Obama will stop in the Toledo area sometime Thursday to kick off the tour before heading to Western Pennsylvania Friday.

Welcoming President Obama to these states are Senators Rob Portman (Ohio) and Pat Toomey (Pennsylvania)  who wrote a “pre-buttal” memo to highlight Obama’s broken promises to these states:

We welcome him, and we hope he takes time to learn about how the private sector is actually doing and about the challenges facing our constituents in Ohio and Pennsylvania.

Voters want an explanation: Why did he fail to live up to the many promises he made to them in his last campaign and during his time in office? As both a candidate and newly-inaugurated president, President Obama outlined a number of specific, quantifiable promises. He said he intended to be judged by these promises, and urged voters to hold him accountable.

When the President pushed his trillion dollar stimulus bill, he and his team promised it would reduce the unemployment rate to around 5.6 percent by today. Of course, in reality, we’ve endured an unemployment rate above 8 percent for 40 straight months—the worst employment numbers in 30 years and a clear policy failure. Today, the unemployment rate is 8.2 percent, 2.6 percentage points higher than promised. What would it mean if he had delivered on that promise? 8.4 million more Americans would have jobs.

This is a promise gap: a clear and demonstrable difference between what the president promised to voters and what he actually delivered. He made a promise on nearly every critical issue of the day—employment, energy, healthcare, housing, and the deficit—that our lives would be better off today if his policies were enacted. By his own standards, he has fallen far short on each and every issue. And by his own admission, such shortcomings are cause for Americans to make his presidency a “one-term proposition.”

President Obama’s campaign knows he has fallen short. They know he has disappointed the American people. You can see it in their ads and in their stump speeches. They are filled with excuses and distortions. They cast blame everywhere and take zero responsibility for the failing economy, the broken healthcare system, the terrible housing market, our lack of an energy policy, and our skyrocketing debt. Instead of “the buck stops here,” they seem to be saying, “the buck stops over there.”

The timing of the tour coincides with the release of new jobs and economic data. On Thursday, ADP releases its jobs survey followed by weekly jobless claims. Additionally, the ISM non-manufacturing report comes out later that morning.  After today’s manufacturing report signaled a contraction in the economy (the worst report in three years), these economic reports gain added importance as we approach election day. Friday’s report is the grand-daddy of statistical releases with the Bureau of Labor Statistic’s monthly unemployment report.  Little improvement over last month’s poor result is expected but all eyes will be on this important release.

Is it Fair to Label Obama ‘Out of Touch’ on Jobs Recovery?

The Las Vegas Sun says “Yes”:

Attack: President Barack Obama is so out of touch with Americans suffering in the economic recession that he thinks the “private sector is doing fine.” He said so.

Method of delivery: How do you know you’ve got a good line of attack? Everybody’s using it. Indeed within days of Obama uttering the now infamous line at a press briefing, Republican Mitt Romney’s presidential campaign had television ads up slamming Obama for it. The line has made it into nearly every Republican’s talking points. And even the outside groups have taken up the mantel. In the days following the Romney campaign’s television ads, the super PAC Restore Our Future had its own version up, and then Americans for Prosperity, a national nonprofit joined suit. That means voters in Nevada and other swing states are getting a triple dose of the same message: Never mind the foreclosures, the unemployment and the malaise, Obama thinks the economy is fine.

Strategy: This one is pretty apparent on its face. Romney’s entire campaign strategy is based on the premise that he is the better candidate to rescue the economy from the lingering recession. Obama’s slip of the tongue gave Romney two platforms from which to make that argument. First, it can be used to portray Obama as out of touch, and, second, that he thinks the public sector needs the attention. “He’s making the case for greater spending,” one Republican operative said.

Fairness meter: As with most lines of attack, there is context here. Obama’s point was that the private sector is stabilizing, while the public sector continues to be a drag on the economy and thus needs federal resources. Later the same day he made the comment, he called a news conference to dial back, stating emphatically that he believes the private sector is not doing fine. Still, Obama said it. And the attack ads don’t even have to pull it out of context. That means this line of attack is legit.

 

Romney Returns to Iowa to Talk Jobs and the Economy

Mitt Romney heads back to the Hawkeye State continuing his focus on the most pressing issues concerning voters across the country — jobs and the economy:

Romney will hold a roundtable discussion [Friday] at 10:30 a.m. followed by an 11:15 a.m. public event at Bayliss Park, 599 First Ave. in Council Bluffs. “He’ll be continuing his conversation on how President Obama’s policies are hostile to job creators,” Romney campaign spokeswoman Sarah Pompei said.

Both campaigns consider this is a Battleground state and recent polls have it dead even:

Both are at 44 percent among registered voters, including those who are undecided but leaning toward a candidate, according to an NBC-Marist poll conducted May 22-24.

The sparks could fly during the visit as both campaigns have used fiery rhetoric during their trips to the state:

On May 15, on Romney’s first trip to Iowa since the Jan. 3 caucuses, he warned of a “prairie fire of debt,” saying Obama broke his promise to tame federal deficits. When Obama made his third Iowa visit May 24, he rejected Romney’s comments as “a cowpie of distortion.” Romney’s proposed tax cut, skewed to the wealthiest Americans, would be “like trying to put out a prairie fire with some gasoline,” the president said.

Poor Jobs Report Creates Opportunity for Romney With African-Americans

No, Romney will not win this demographic nor will any Republican any time soon.  But what a Republican can do is erode the overwhelming support Democrats receive and specifically the astounding 95% support President Obama achieved in 2008.  The Romney campaign is already capitalizing on the disproportionate unemployment impact on Hispanics and the RNC has a web video emphasizing the unemployment impact on various groups like African-Americans while Obama and his elitists worry about his job:

Now we see that Friday’s jobs report disproportionately impacted African-Americans as well:

Last Friday’s unemployment news crashed the stock market and upended the presidential race…Nationally, unemployment in May rose from 8.1 percent to 8.2. This is bad, especially considering how much time has passed since our economic troubles began…Lost in [all] the…news that African-American unemployment, already significantly above general levels, rose by much more. As The Root reports, for African-Americans, however, the news was much, much worse. Unemployment among Blacks rose from 13.0 percent to 13.6 percent. This is serious news for a population that is already under great economic strain, but it is in line with some trends we’ve been following here.

This creates an undeniable opportunity should the Romney campaign choose to capitalize:

The decline of the blue social model is a challenge to the survival and dignity of the Black middle class. Heavily invested in government employment and well represented in organizations like the Postal Service, African Americans are vulnerable to changes in the structure of government and the cutbacks now rippling through traditionally stable employers like the USPS.

We are already seeing reduced support for Obama within the African-American community:

Obama is winning the African-American vote by gargantuan proportions: 90 percent to 5 percent in the first half of the survey and 88 percent to 6 percent in the second, not far off his 2008 showing (95 percent to 4 percent).

The opportunity is there for Romney but it won’t be easy. George Bush made concerted campaign efforts to court African-Americans despite the often hostile reception from activists within the African-American community.  This yielded 11% of the their vote nationally in 2004 (and 16% in Ohio), far better than McCain’s dismal 4% in 2008. Those Bush totals in 2004 and Obama’s incredibly 95% in 2008 swung all-important states like Ohio for each candidate.  With that state being ground zero for this year’s election, it would behoove the Romney campaign to get on this.

Ohio Demographic Watch — White Working Class

Each Battleground state presents its own unique constituency with fears and hopes often unique to that state.  To make sweeping generalizations across large swaths of the country is usually foolhardy and will often lead to poor strategic analysis of any state’s pressing issues.  Thankfully a few news outlets are drilling down within these battleground states and attempting to glean some insights into what are the most pressing issues of the day and what we can expect to ultimately sway these voters in November.

Reuters is taking yearlong polling that focuses on the diverse group of voters in play across the Battleground states and reporting their findings. Today they discuss white working class voters — men and women without college degrees who earn middle-income wages — who make up more than half of the electorate in Ohio. This is much the same demographic making noises in uncontested Democrat primaries by voting in large percentages for “protest” candidates or actually checking the box for “Nobody.” But while this demographic is not a natural voting bloc for Obama, they have plenty of reservations about Mitt Romney also:

As of this week, white working-class voters across the Rust Belt leaned toward Romney, with 44 percent of respondents in a Reuters/Ipsos poll saying they would vote for the Republican if the election were held today, versus 30 percent for Obama. (For purposes of the poll, the Rust Belt includes Indiana, Michigan, Ohio, and parts of New York and Pennsylvania.)

In Ohio specifically,

Obama carried the state by five percentage points in 2008 [but] the wobbly economy offers Romney a powerful opening. [Romney however] has struggled to relate to blue-collar voters.

Within this context important themes emerge:

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Who Gets Credit for Battleground State Economic Turnarounds?

In every poll, no matter the source, one theme remains constant across the entire country — the #1 issue this election year, and there is no close #2, is the economy.  Since the election outcome will be determined by only a handful of states, the economic conditions in those states is of paramount importance.  This has created an odd paradox in today’s politics — Battleground state economies are rebounding where there is a newly elected Republican governor. So who gets credit: the Democrat in the White House or the Republican in the State House?  The answer to that question (which can only be answered by the electorate in November) will determine the winner of this year’s Presidential contest.

Michael Crowley in Time magazine takes a crack at this topic but frames it as Romney’s campaign rhetoric running down Obama’s economic performance versus GOP governors touting their reforms that have reversed state fortunes.  It’s a different spin (and a negative Romney spin at that) on the same paradox. First up is Ohio:

The great recession has left the state of Ohio battered and bruised–and Mitt Romney would have you believe it’s Barack Obama’s fault.  Romney advised Ohioans that the President has delivered them “paltry results,” and that their state is in need of “a fundamental change in direction.”

Which contrasts with Republican Governor John  Kasich’s assessment:
“I’m very comfortable with the [economic] trend we have in our state,” Kasich said. “Our unemployment has dropped I think more than most other states.” (He thinks right.) “We’re [moving] in the right direction,” Kasich said. At 7.4%, Ohio’s unemployment rate is more about a half-point better than the national average of 8.1 percent; more importantly, it’s improving about twice as fast as the national number.