WILLIAMSBURG, Va. — Last week’s jobs report provided President Barack Obama with perhaps the only bit of good news since his disastrous debate against Mitt Romney, but there are suggestions that the figure could wind up having been too much, too soon for Obama.
The unexpected decline in the unemployment rate based off the monthly household survey from 8.1 percent to 7.8 percent was a needed boost for Obama at one the worst moments of his political career. The next one is due out at 8:30 a.m. on November 2, four days before Election Day.
The results offered such a boost that they sparked suggestions from the political right that the numbers were somehow manipulated by the labor market — a complaint that overshadowed the simple fact that these numbers fluctuate, often wildly, largely because of standard statistical error, itself raising the potential of a political nightmare in the days leading up to the election.
Obama’s poll numbers have not typically been linked to fluctuations in the jobs report and the unemployment rate this year, but the anticipated jobs headline on November 2, 96 hours before polls open across the country, has the potential to be one of the only items to break through the pre-election news jam. And bad jobs news would be a big story.
“Of course we’re worried about it,” admitted an Obama campaign aide, on the prospect of an eleventh hour jobs report showing a spike in the unemployment rate. “But thankfully a large portion of the country will have voted by then.”
Indeed, a higher figure is not just possible; many on both sides see it as likely.
“The unemployment rate in the next jobs report will likely be higher than 7.8,” said American Enterprise Institute economist Michael Strain. “Whether that is 7.9, 8.0, 8.1, I don’t know.”
“The conspiracy stuff is BS and a distraction,” he added, saying that the data fundamentals provide enough reason to consider a so-called “November Surprise” a major possibility. “That being said, it’s also true that 800,000 jobs weren’t created in September.“
The Current Population Survey, on which the unemployment rate is calculated, has a 400,000 job margin of error, and showed 873,000 jobs were created in September and 456,000 people who left the category “unemployed.” That puts the range for the September unemployment rate between 7.5% and 8.1%.
A result next month on the higher end of that scale would hardly be a surprise said former Obama economic adviser Austan Goolsbee, who has warned of a sluggish drop in the unemployment rate all year.
“It’s possible that there be a reversal a month later when you get such a dramatic drop in the unemployment rate in one month,” he said, emphasizing the slow, steady and slow decline over the last few months as opposed to just sudden decline in the September report.
The surprise increase in the number of part-time workers, responsible for much of the job creation, struck Goolsbee, like many economists, as potentially a statistical anomaly.
“If next month you get 400,000 entering the labor force without the new part time jobs, it’s going to pop back up — and that’s more likely than it staying the same,” said a Republican economic analyst with ties to the Romney campaign who was not authorized to discuss the jobs figures.
“We would of course like to see recovery, but that’s not what happened in September, and it won’t happen until we see a real change and elect Mitt Romney as the next president of the United States,” the analyst said.