Unfortunately, The Gear For This Jobs Report Isn't Hooked Onto a Machine to Produce ANYTHING..... Much Less Jobs.
Yes, we're back.... Even if only for a day. Truth is, there has been way too much more important things going on with us than politics. Although we are kinda political junkies here, we still are grounded enough to know that it IS just politics. Yes, we watched some of the DNC and RNC Conventions, but to us, it's all a pile of BS. Football season is finally here, so if we want to watch cheerleaders in front of tens of thousands of Kool-Aid drinkers, we'll catch a game between the goalposts..
Nope, it was REAL news that got us back on our old Dell Inspiron 6000 - The Economy. Namely, jobs - or lack of them. We'll be honest, we got a bit fooled by this one. Yesterday, we got a false alarm that maybe things had finally turned Barack Obama's way. ADP had reported that payrolls increased by 200,000 jobs, which helped spike the Dow Jones up 244 points. So, when we got out for lunch and heard that the unemployment rate had dropped from 8.3% to 8.1%, we thought maybe that 200,000 had been underestimated. We even had a theory for it - the Supreme Court ruling on Obamacare may have led some employers to just go ahead and start hiring. But, that had nothing to do with it...The fact was that in the wonderfully complicated world of the Unemployment Rate, there was nowhere near that amount of new jobs - yet Obama may have moved closer to getting re-elected despite it. Such is politics.....
You may have heard by now, but only 96,000 jobs were created, about 25% less than is needed just to keep up with population growth. So, how does the unemployment rate go down 2/10th of a point, much less at all? Here is the big stat: the number of people who quit looking for work. That number was a scarily astonishing 368,000 people - in a month. Yep, school was out, and once they realized the Summer gigs were dried up, people flat out gave up. To put it in terms South Carolinians can wrap their brains around, enough people left the job market to equal the populations of Charleston, Columbia, Greenville, Spartanburg and Rock Hill....... COMBINED! The job participation rate is at it's lowest point in 30 years.
Yep, for every person who got a job, almost four said 'F**k It', and quit.... So by now, you're probably asking 'Hey Reino, how can 368,000 people leaving the job market possibly be good news for Barack Obama??'. Here's how. Like we said, politics makes no sense, but there are many statistics that have been reliable in elections - and the unemployment rate is one of them. If you haven't read this post before, take a minute or two to do so, and then rejoin us.... We'll wait.
OK, 15 out of 16 elections, with the only exception being the disastrous 1968 for the Dems, are pretty solid stats. The important number is what April was, and the answer to that is 8.1%... So, where the rate had jumped 2/10th since April, we are now back at Square One. There are two jobs reports between now and Election Day, so the change in unemployment could be as tight as the race between Obama and Mitt Romney. It's pretty simple: if Barack Obama is able to convince America that is headed in the right direction - even if it's only by 1/10th of a point - the undecideds that will determine a President could likely go his way.
We're not saying that is how it's going to go... But last month, we were pretty sure that Barack Obama was going down based on the same evidence. Now it's all up in the air. Do we think people will continue to leave by the hundreds of thousands into the Fall, thus improving Obama's chances? We doubt it. However, with so many variables that play into the rate in flux, we don't know if we'll be at 8.1, 8.2 or 8.0% or under on November 6th..... It may not seem like a big deal, but every tenth of a point counts.