The 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.
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.