As regular readers know, I am not an optimist. Most probably think me cynical and pessimistic. I don’t see myself that way. I just react to reality as I find it. And sometimes, I’m really optimistic. After the first presidential debate in 2012, all my liberal friends were bummed out. So was I. But then the October Jobs Report came out and it was great! So I became downright cheery because, “It’s the economy, stupid!” But most of my friends did not see it that way. But they were wrong and I was right. I don’t mean to gloat. I just mean to point out that when I’m optimistic, you should probably pay attention.
Like most liberals, I am concerned about the Democrats losing the Senate in November. For a long time, I’ve estimated that that this has about a 50% chance of happening. Indeed, that is more or less where The Upshot has been predicting for months. But the one thing that will really improve the Democrats’ chances is if the economy continues to improve. And I’ve been pretty bullish on this. It’s really very simple. The economy is under-performing. There is a lot of unused capacity and I just don’t see a reason why things would reverse now.
But in case you didn’t know it, it is not the first Friday of the month. But tomorrow is a federal holiday, so the Bureau of Labor Statistics (BLS) has come out with its June Jobs Report. And it is a humdinger! The economy added 288,000 new jobs. And the BLS revised the last two months’ employment figures up by a total of 29,000. That actually puts April creating 304,000 jobs. You can always find things in the jobs report to complain about, but overall, it is a really good report.
If you want to get into the details and even find some things to feel bad about, Matt Yglesias at Vox, put together an excellent run down of what various people are saying about various parts of the report, Economy Adds 288,000 New Jobs, Unemployment Rate Falls. You might have noticed that I didn’t mention the unemployment rate. That’s because it is meaningless. In particular, the economy still hasn’t turned the corner in the eyes of Americans. More people are leaving the job market than are finding jobs. But it looks like this will not be true for much longer.
The reason this makes me feel better about the Senate is that as the economy improves, so will people’s opinion of President Obama. And so when they go to the polls, they will be more likely to think, “You know, the Democrats are doing a good job; now is not the time to switch horses.” Even more important, feeling good about Obama will make more Democrats decide to actually go to the trouble of voting. And it won’t take much for the Democrats to hold onto the Senate.
It is still too soon to tell. But if July adds 300,000 jobs and August does the same, people are going to notice. That alone will probably reverse the dominance of people leaving the job market. And that means people will be feeling better about the state of things. Of course, even if the Republicans do retake the Senate, it won’t mean much. They are almost certain to lose it again in 2016. But having a Democratic Senate would generally be helpful to Obama in his last two years—especially regarding the appointment of judges. If the Republicans take the Senate, they will probably not allow anyone to be confirmed. That would be bad, but not catastrophic.
So it would be best if the Democrats held onto the Senate. And today’s Jobs Report bodes well for that.