It's the 4th of July.... and for most of us , that means cookouts, fireworks - and some hot assed weather! However, for the economic wonkish of us, we're looking forward to Friday... Why - because it's the weekend? Nope. Because it's two days closer to my birthday on Monday? Uhh, no... It's because Friday is the day we get the most important statistic related to November's presidential election - the unemployment numbers for June 2012! We knew you'd be excited..
No, the monthly tracking of whether the rate went up or down a tenth of a point, or stayed the same is of little consequence.. or is it? We've gone over the relationship between unemployment and electability a few times, so we'll skip it. However, we have a sneaking suspicion that this one will be more epic than the last few... For the first time in 21 months, we could have NEGATIVE job growth. We're not talking about people stopped looking for jobs, or not enough new jobs to keep up with population... We're talking about LESS jobs overall.
What makes us wonder this? A couple statistics. First, the trending down of created jobs for the past few months, down to a pretty low 69,000 last month - half of what the Labor Dept. predicted. If it's going the wrong way, it may very well continue that path, and other numbers back that up as well...
For starters, the new filers for unemployment are on the rise again. It is essentially the precursor to higher overall unemployment rates. Where they were averaging 340-350,000 per week, they have risen to 380-390,000 again. Add 40,000 new unemployed per week, and there's a good chance that 69,000 will drop. Also, generally June is not a good month unemployment-wise. In the past 20 years unemployment has dropped only 4 times, while it has risen 10 times and remained the same 6 times. In other words, there's an 80% chance that it will be the same or worse. Even when you take the actual created jobs, the June jobs created over the same time from May, 8 of the 20 years were worse.
But wait - there's more! June is the first month of Summer, when all students are doen with school - and looking for work during vacation. Many of them will not find work. Student unemployment is nearing 50%, mainly because of the weak economy, and the downflow of underemployment creeping into the jobs students usually get. When people look for work but can't find any, the labor pool rises - and unemployment goes up. Worst of all, the global slowdown has caused manufacturing production to drop for the first time in years - mainly from a decreased foreign demand.
Yes, all the signs are there, and those of us who care about WHY these things are occuring can't wait for Friday's numbers.. Seeing the unemployment rate tick up to 8.3% wouldn't surprise us. That is all most will look at, and get depressed or happy. However, it's the numbers inside that 8.whatever that really matter. If the actual number of employed drops, that will be catastrophic for Barack Obama. He has constantly talked up the 4 million jobs created over 26 months, but the problem is that they were created over the first 20 of those months. The ride is over, and we might well be dipping into another sputter economically - then the spin begins all over again.
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