August Jobs Report and the Presidential Race

Hillary Clinton - Jobs ReportThe polls continue to look better and better for Donald Trump. FiveThirtyEight’s “polls plus” analysis now give him a 30% chance of winning the presidency. This would be a catastrophe for the country. And I say that not because he is a bigot and a buffoon. I say it because if elected, he will be just like any other Republican. The truth is that I believe this presidential race will be like any other one: a Democrat versus a Republican. And so what we really need to do is look at the fundamentals. And that’s why today’s jobs report is important.

Today’s report is slightly bad. The economy added 151,000 jobs, this is a bit less than expected. The unemployment rate stayed flat at 4.9 percent. Since my very simple model of the presidency only takes this number into account, it isn’t good news. Whereas last month, Clinton had roughly the advantage that her husband had against Bush in 1992, she now has the advantage that Al Gore had in 2000. The trend is not good, but certainly it is better to have the economic fundamentals on your side than to not.

Does It Matter That Trump Is a Terrible Candidate?

Now it is true that Donald Trump is a terrible presidential candidate. I don’t mean that in an ideological sense. I mean simply that he isn’t good at the nuts and bolts of campaigning. But I really wonder if that matters. And I’ve wondered that for a very long time. While virtually every liberal I know is outraged about Citizens United and money in campaigns, I’m really not. It is clear to me that money soils politics indirectly because politicians believe that they need it and so govern in ways they wouldn’t normally. What happens usually is that business interests see that a candidate is going to win, so they flood them with cash they don’t need in order to curry favor.

Whereas last month, Clinton had roughly the advantage that her husband had against Bush in 1992, she now has the advantage that Al Gore had in 2000.

It’s quite clear why Trump’s polling looks better: Clinton has been getting a lot of bad press recently. And this will change over time. But it does seem that there is nothing that the Clinton or Trump campaigns themselves do that has much of an effect on the numbers. The only reason I’m not freaking out and making plans to move to Uruguay is that I think the baseline for Trump is low and that the economy will remain stable through election day.

The Jobs Report Won’t Change Next Month

It would not surprise me in the least if the next jobs report has the same 4.9 percent unemployment rate. There will also be a jobs report right before the election, but my model disregards it. Anyway, I won’t be surprised if it too is 4.9 percent. It’s funny that this seems to be the new normal. Of course, it isn’t helped by the Federal Reserve. The top two people at the Fed seem to look for any opportunity to tell everyone that they really, really, really want to raise interest rates. And this always has the same effect of freaking out the business community and constraining the economy.

And what does this jobs report tell us about the current state of the economy and if the Fed should really be worried about inflation? Well, Dean Baker noted a few things that are interesting. First, although the employment-to-population rate was unchanged, it was down 0.2 percentage points for prime age workers. And it is still 2.5 percentage points below its pre-recession level. There was an increase of over a hundred thousand people working part-time involuntarily. The total number of hours worked is down. And wages are not accelerating. So where is the potential inflation?!

The Fed Won’t Screw Us — Yet

The one good thing is that this jobs report does not give the Fed any excuse for raising rates before the presidential election. And that’s good news for the country, because any Republican president would be terrible just on the basis of the Supreme Court. But you can depend upon the Fed to screw the American worker just as soon as they can possibly justify it.

This entry was posted in Politics by Frank Moraes. Bookmark the permalink.

About Frank Moraes

Frank Moraes is a freelance writer and editor online and in print. He is educated as a scientist with a PhD in Atmospheric Physics. He has worked in climate science, remote sensing, throughout the computer industry, and as a college physics instructor. Find out more at About Frank Moraes.

11 thoughts on “August Jobs Report and the Presidential Race

  1. I guess we will see which will win-better organization or the economy. Because Clinton has thousands of people working an her behalf both full time staff and volunteers and the numbers keep staying fairly steady.

    • If the economy is election variable #1, then certainly turnout is #2. And certainly a ground organization can help with turnout a lot — telling people where their polling places are, giving them rides, etc. And we know negative campaigns decrease overall turnout. And Republicans know this too, which is why they always run negative campaigns. So Clinton’s organizational mastery will make a difference, I’m sure.

      • I think turnout should be all that people should worry about. There’s nothing you can do about the economy. (Well, other than what I do: worry.) I think most things campaigns do are useless. But turnout isn’t sexy. I really see campaign professionals as being mostly scum — and not all that smart.

    • Statistical analysis shows that the economy is about 40% of the effect. I don’t mean to imply that my ridiculously simple model is all there is. But this is frightening: if the economy crashed and unemployment went up to 6 percent by November, Trump would win in a landslide.

      Every time I read about Trump having virtually no “ground game” I’m pleased. That does matter. But nothing is as important as the economy.

  2. I live in Southern California. I was unemployed for two years. Salaries have come down here. The economy job market is very hard.

    Chris
    Owner CEL Financial Services
    Registered bonded California CTEC Tax Preparer

      • He commented months ago and so automatically got posted. I would just delete it, except I rather liked your comment. I did, however, remove the links.

  3. I fell asleep to YouTube tonight and woke up in the middle of the night; the YouTube had gone onto some damned CNN “debate panel.” You know, these awful things where blathering people yell over each other. And it epitomized everything that’s wrong with media and our politics.

    The CNN “moderator” showed two rally speech clips of Trump. In the first, he was promising to deport every undocumented immigrant. In the second, he was less stringent about this, but declared he would “collect all their back taxes.”

    The CNN moderator then asked, “doesn’t this show Trump is a flip-flopper?” Oh, Lord.

    What a tired label nobody cares about anymore. Far more important is that both statements by Trump are gibberish. You can’t deport that many people, it’s logistically impossible. You can’t collect “back taxes” on people who are paid under the table — and the ones paid legitimately already pay taxes, and are not undocumented.

    Naturally, nobody challenged this nonsense. Just like nobody challenges Trump’s magical unicorn “wall,” or proposals to ban Muslims from entering the country, which even our current SCOTUS would strike down. (5-3, I’d guess.)

    But yelling is good TV, I guess. It’s loud, like commercials. TV is visually boring, for the most part, so loud sounds catch the attention of idle viewers.

    At this point I think Republicans could promise to Restore The Fatherland with space cantaloupes and get away with it.

    • I don’t watch TV news. It just gives me a headache and makes me angry. I got angry a couple days ago for a dickheaded article in the NYTimes. I was so livid I was literally sputtering in rage but it netted me 50 new followers on Twitter so silver linings I guess?

      • I have a sneaking suspicion the NYT was always vastly overrated. Maybe the sentences were a little better crafted and the vocabulary a little larger than some other papers. But essentially it toed the same line as the rest of American corporate media. I did enjoy reading the arts section when I was in my 20s, it’d probably make me barf today.

        I don’t watch TV news either. But you know YouTube. If you put it on something you like to go to sleep, it keeps going, and eventually cycles onto popular stuff its algorithm thinks you would like.

        That must be one of the advantages of Twitter; when you’re mad, you have to hone it down to a few words. When I’m mad, I tend to rant forever!

    • The flip-flop label is just about this idea of authenticity that Americans do seem to care about. For example, they will vote for someone he is true in believing everything the people are against rather than some pretender who will just pass laws because the they think the people want them. It’s maddening.

      And yes: you nailed it regarding the media. It would show bias to say: this man is not serious. But it doesn’t show bias to say, “Look! He said different things at different times!” Of course, it won’t hurt Trump. Trump is authentic in being totally chaotic. People love that. Assuming Clinton wins, this election will still be an embarrassment. Trump shouldn’t get more than 30% of the vote. He’ll get at least 45% of the vote. What does that say about us?

Leave a Reply

Your email address will not be published. Required fields are marked *