Tomorrow, at 8:30 a.m., the models employed by the Bureau of Labor Statistics will spit out the latest estimate of how many jobs were added in the U.S. in September (as well as refined estimates of how many positions were added in August and July). And it’s not too hyperbolic to say that this will be the most important, consequential, meaningful data release. Of all time. Ever.
In ordinary times, the business press tends to get hyped about economic data points, even when they shouldn’t. Designers construct widgets that count down the minutes and seconds that must elapse before we get the latest reading on industrial production, or tire inventories in Belize, or the much-heralded Irkutsk Purchasing Managers Index. Guests stand by on television studios ready to offer instant analysis. Writers of all stripes constantly reload websites in anticipation, ready to tweet, blog, or Instagram the results to their followers. I know, I’m one of those people. (Our crack Daily Beast graphics team has even built a countdown clock.)
In an election season driven by economic news, the mania for economic data spills over from the business section to the political pages. The monthly jobs figure released by the Bureau of Labor Statistics, which produce the all-important unemployment rate and the payroll jobs figure, is generally the most relatable, sexy and headline-grabbing member of its class. Think of it as the Kate Upton of economic data.
Voters and pundits don’t really care about GDP growth, or the volume of same-store sales growth, or industrial capacity utilization. It’s all noise. But jobs are easily understood. The most salient trends about the U.S. economy over the last several years have been the very rapid loss of millions of jobs and the slower recovery of many of them. Once a month, BLS either gives an incumbent occasion to crow about job growth (our policies are working!), or grants license to an opponent to lament the pathetic state of the economy (fire the bum!). This piece of data fits seamlessly into a campaign narrative.
Voting has already started in some states, and is about to begin in others. The September jobs report essentially presents the last great opportunity for President Obama to point to a positive piece of data and argue that the U.S. should stay the course. After all, the U.S. private sector has created more than four million jobs since February 2010, and has added jobs for 30 straight months.
The September jobs report also presents the last great opportunity for Romney to point to a negative piece of data and argue that the U.S. should shift course. Total employment in the U.S. remains about 261,000 jobs below where it was in January 2009. Yes, we’ll get the October jobs report on Friday, November 2, just a few days before the official Election Day. But by then, the race, and much of the voting, will already have concluded.
So what should we expect tomorrow morning? The trend has not been particularly favorable to the President in recent months. Sure, the economy has been adding jobs consistently. But the trend has been weak during campaign season: 45,000 jobs in June, 141,000 in July, 96,000 in August. Not enough to make a dent in unemployment, or to crow about too loudly. Employers remain hesitant to fill the millions of positions they have open.
Think of it as the Kate Upton of economic data.
That said, the trends in September would seem to point toward a positive number, if not a hugely impressive one. First-time unemployment claims were generally down for the month. On Wednesday, ADP, the payroll-processing company that produces its own estimate of jobs growth each month, said the private sector added 162,000 positions in September – a solid number. And as the blogger/investor/columnist/analyst Barry Ritholtz points out, federal tax withholdings on wages have been growing strongly in recent months. The flow of data would seem to point to continued jobs growth. If I had to go out on a limb, I’d project that September’s jobs report will show a more-than-decent gain – of up to 200,000. (If this prediction comes true, I’ll tell you about the super-secret source I relied on. If it falters, I’ll tell you who to blame.)
That said, there’s something important to keep in mind about the jobs report. While it may matter for the campaign narrative, this isolated piece of data will tell us next to nothing about what really happened in September. The BLS report, like most pieces of economic data, is an estimate. It’s filled with seasonal adjustments and margins of error. September’s jobs report will be revised in November, and again in December – and again next year. It turns out that these numbers that we get so excited about, the ones that move markets and page views, the ones that influence election results –they’re nowhere near the final answer.