The U.S. economy added an estimated 171,000 jobs in October, according to a Nov. 2 government report, which also made upward revisions to August and September figures of some 84,000 previously unreported jobs. It’s the second straight month with large positive revisions, erasing concerns prevalent in August that the lumbering recovery had ground to a halt.
This is potentially big news for presidential politics. But not in the way you might think.
Don’t be fooled by Democratic backslapping or ludicrous Republican spin. (Conservatives are eagerly pointing out that the 7.9% unemployment rate is a tenth of a percentage point higher than the day Obama took office in 2009. Employment fell off a cliff shortly thereafter, and the reason the rate ticked up in October was that Americans were rejoining the workforce — all-around good news.) The October report won’t have any real effect on the outcome of the presidential election Nov. 6. To reiterate what we’ve written before, economic news takes some time to sink in with the electorate. No one’s going to print out the latest Bureau of Labor Statistics Excel spreadsheet to bring with them into the voting booth.
The reality is that the economic news from the past six months — a frustratingly slow recovery but a recovery all the same — is already baked into President Obama’s numbers. Just as Republicans can’t credibly claim most voters will hold Obama responsible for catastrophic losses at the beginning of his term — and in fact most polls still show more voters blame President Bush for the economy’s woes — Democrats can’t credibly claim the upward revisions announced Nov. 2 will improve most voters’ impressions of Obama’s handling of the economy before Election Day. But the increasingly positive trajectory is politically important all the same.
As Derek Thompson points out at the Atlantic, “Whoever wins on Tuesday inherits an economy that is still awfully weak and a jobs recovery that’s clearly gaining momentum.” To put it another way, the next President will preside over an economy with a large capacity for job growth in the next four years. Mitt Romney was shrewd enough to recognize this fact early on and has focused his closing pitch around a pledge to create 12 million jobs in his first term. This is deviously brilliant — and a little dishonest — because that’s on the conservative end of what nonpartisan economic forecasters expect to happen under current policies. Obama, perhaps wizened by the painfully inaccurate consensus forecasts in the months before he took office, has not tried to take any credit for these projections by claiming that they’re due to his policies.
Ultimately, monthly jobs reports are just surveys with fairly large margins for error. It’s always silly to make sweeping pronouncements about the state of the economy on the basis of any one metric in any given month. But historically there’s been a pattern to mistaken economic forecasts. In a recession, the eggheads tend to underestimate the depths of distress. Conservative estimates in bad times have turned out to be woefully wrong, as they were in late 2008. But the reverse is also true: large upward revisions to recent jobs reports suggest we might see more upward revisions to all sorts of economic figures in the coming months — a recovery with real momentum. Whoever wins on Nov. 6 will likely get the credit. And either way, you’ll hear a lot about it for the next four years.