Unemployment and November
In March, I debunked the Fox News claim that, after a one-month stall at 8.3%, “unemployment is not likely to fall much further and may rise again.” The message was that there is no hope for improvement, and that the numbers will stall or get worse for the indefinite future.
In the five months since then, Fox might, without looking too closely, seem to have been correct, in that the unemployment numbers have stayed steady since then:
- February: 8.3%
- March: 8.2%
- April: 8.1%
- May: 8.2%
- June: 8.2%
- July: 8.3%*
*July is really 8.254%; “8.3” is a rounding-up from that. It is only slightly up from 8.217% in June.
However, as I pointed out in March, conservatives often seem blind to the fact that unemployment numbers are a lagging indicator, especially when it means they can make Obama look bad, or their own guys look better.
Knowing that the unemployment rate lags about 9 months behind the jobs numbers gives us a bit of a crystal ball to see what will happen in upcoming months as far as unemployment goes. Yes, I know that it’s not that simple, but there is, in fact, a correlation. For example, the recent stall at 8.3% to 8.1% beginning last February matches very nicely with the stall in job creation that happened last year in May.
In March of this year, I predicted:
The bad news for Obama is that, for the next 4-6 months, unemployment will not be so hot–it may drop a point or two over the next 4-6 months (numbers might show a drop in June or July more than other months)…
I was not spot on where the slight drop would occur, but I was correct in that it could vary by a point or two. The real test, however, will be in next three months, about which I made this prediction:
[The unemployment rate] may not really start to change again until just before the election–which is the good news for Obama. The rate should start dropping regularly come September, when we see the numbers for August.
Based on nothing but a guess, I would say that the unemployment rate will probably be between 7.6% and 7.8% come November. The last three months, all good gainers, will show up in the unemployment rate in the three months leading up to election day.
That still remains a distinct possibility. My prediction was based on this chart:
A slump in job creation hit in May 2011 and continued for roughly six months up until October. Nine months forward, this would apply to February to July–which is precisely where the unemployment rate stalled. Then, from November 2011 (August 2012) there was a surge again, with overall job growth going above 200,000 per month. If the correlation holds true, then we should be seeing the unemployment rate going down again starting next month, at latest in October, but with an appreciable drop when the numbers come out just before election day.
Note that I am not hailing a recovery or anything, but rather simply the short-term number which could have a real effect on the election this fall.
In the meantime, I am otherwise sanguine about Obama’s chances. Yes, the wingnuts have been going to town with the dishonest “You Didn’t Build That” campaign. However, Romney has been obliging in shifting the focus to his tax returns (making it seem for all the world that he’s hiding some pretty bad stuff in there), his tax plans (raising taxes on the 95% to pay for yet another whopping big tax cut for the rich), and his gaffe-tastic trip abroad (demonstrating that not only can he not handle foreign policy, he can’t even keep from pissing off our strongest allies for a day or two).
In the meantime, while the popular vote has not shown much shift (Obama 50.7%, Romney 48.3%), Obama has made significant electoral gains. Not just in total numbers (he currently leads Romney 300 to 238), but in how much he may have key states locked up. Pennsylvania was supposed to be a battleground state; the numbers have shifted so far in Obama’s favor, however, that Romney gave up and stopped advertising there. Ohio and Florida have shifted to Obama’s column fairly significantly, with Obama enjoying 6-point leads, which may expand as economic forecasts for those states predict improvement. At FiveThirtyEight, Obama is projected to have a 55% chance of winning Florida, and a whopping 71% chance of winning Ohio. In fact, Obama now leads in all swing states.
Not that things can’t change. However, there is presently no evidence that they will. If a change comes, it will come from somewhere we do not expect–a terrible last-minute scandal that Obama cannot deflect like Bush did with his drunk-driving charge, a sudden, unexpected economic downturn, a series of bad gaffes on Obama’s part–that kind of thing. The odds, however, seem to be against that.
In fact, I now see enough breathing room to tempt fate and possibly even foresee excellent election results for not just Obama, but the Democrats in general. Right now, both the House and the Senate look like toss-ups. However, look forward to November: what if Romney is in the doghouse, and enthusiasm for Obama is up? That could have a negative effect, as Obama voters will not feel as threatened and may feel less inclined to vote (an effect magnified by vote-suppression campaigns by Republicans, not to mention massive redistricting).
What about the other side, however? If Mitt Romney stands little chance to win, what effect will that have on Republican voters? A key point here is religion: traditionally, the strongest get-out-the-vote campaigns have come from the churches and fundamentalist elements, the deep-red areas which rally to send out the troops. What if the election is about sending these warriors of God out… to vote for a Mormon who stands little chance of winning anyway?
I am not talking about the possibility of a landslide for Obama–I refer instead to the possibility that a depressed fundamentalist vote in red states could lead to unexpected gains for Democrats in down-ballot races, possibly giving Democrats a majority in both the House and the Senate.
If they can win that, and if the rumors are true that Democrats in the Senate will finally wake up and realize that Republicans have succeeded in utterly destroying the usefulness of the filibuster in overall terms, then when the Senate resumes business next year and Democrats have a chance to rewrite the rules, they could do away with it–and, as a result, they could actually start to get things done without Republicans blocking everything.
This is my big hope–not that Romney loses big, but that the built-in religious prejudice, which until now has hindered Obama and the Democrats, will finally come home to roost for the right wing, possibly handing Congress to the Democrats.
If that happens, maybe Democrats can start some real infrastructure spending, raise taxes on the wealthy to a reasonable level, cut them a bit more for the middle class to help get the flow running better, and help at least some form of recovery finally come along.
In short, after four years of Republicans “leading from behind,” we can actually have a Democratic presidency which is more sabotage-proof than it has been.
Of course, Obama will probably make concessions to Republicans even then, even when he doesn’t have to.
Great post Luis. I know it took a lot of time to write this and present it – but it was worth while and I really enjoyed reading this.
A couple of points:
You said:
“Not that things can’t change. However, there is presently no evidence that they will.”
Last night, or the day before, on the CBS evening news the commentator said that, according to polsters, something like 94% of the people who are leaning one direction or another are not going to change their vote before the election. Her point was that the huge campaign spending was simple for the sake of a very small, and getting smaller, segment of voters.
On Religion:
True fundies can’t stomach a mormon, and this one looks lying and ingenuous and far too rich to make the connection with them. The Fundie leaders will make the effort, but I predict it to collapse.
On the fillibuster:
What I’d like to see is the Dems, if they have a majority say, okay we’ll keep the fillibuster but you only get three a year, over a decade, and the Republicans have already used up all of theirs for the rest of the decade and perhaps for the next fifty years. But getting rid of it all together would be fine too.
On the consequences:
An Obama win will save Obamacare, and that will save tens of thousands, perhaps even hundreds of thousands of lives each and every year, and probably over a million a decade.
A few minor tweeks to the system, such as the government creating a commission to set prices for services, like is done in Japan, Korea and Taiwan – could drive healthcare cost down even further. That in turn could release purchasing power, powering demand in the economy. Dems really deserve to get credit for such an increase in the economy – they made the political sacrifice to do the morally responsible thing. In this sense, Obama begins to look like Lincoln to future historians. And Republicans? Like Jefferson Davis.
Overall:
The nation really needs a massive infrastructure push. New high speed railways, new airports, new roads, new intra-city rail transportation, more investment in education. Our society NEEDS higher, much higher, taxes on the Rich.
On the left-right thing, Obama and Romney are perhaps a very narrow difference from each other. But in the scheme of things, a Romney win would most certainly doom the country to third world status. Oh, I’m sure the Republicans will release funding for infrastructure if they gain power and the economy will improve, but over all, over the long term, the Rich demand 7% growth in ROI every year, that’s 100% (a doubling) every ten years. That money has to come out of the middle and working classes hyde. The ultimate destination then, is planet banana republic. There’s no avoiding that.
I would love to see the scenario you envision. I would love to see America tax the rich and rebuild it’s infrastructure and lower its health care cost and I’d love to see the boom in the economy and the jobs growth and unemployment as a result and the credit – all of it, go to Obama and the Dems.
As things stand now, when the Republicans want to talk about their track record on the economy they love to talk Reagan. They can’t talk Bush II because he destroyed the economy, they can’t talk Bush I because he raised taxes and still created very few jobs. Pretty soon the number of voters who remember the Reagan years are going to shrink – and to everyone else Reagan might as well be Calvin Coolidge or Millard Fillmore or even John Adams. He’s ancient history and no longer a modern president – hell that was the Cold War, there was a Soviet Union, and China’s chief export was rubber thongs.
A second term boom for Obama will totally destroy what’s left of Movement conservativism. On one side of the Bush presidency, You will have the Clinton presidency which will have created 23 million jobs in eight years and a balanced budget. On the other side of the Bush Presidency you will have an Obama presidency which will hopefully be able to claim the creation of at least 10 million private sector jobs (which would only get us back to where we started when the recession began, so hopefully even more still). And in the middle, where Bush is, you will have a BIG FAT ZERO for private sector jobs created.
Maybe America can finally move away from this dark age we are living through. The demographics will start to alter places like Texas – the home of reactionary movement conservatism. We can only hope. The world NEEDS a responsible, competent America. Not a rogue vigilante America. And of course, none of this darkness would have settled in had not the Supreme Court not installed Bush in the presidency in the first place. Maybe we can figure out a way to fix that too.
Your post paints a very optimistic view of American politics.
I agree that if the employment number keep rising as they have been, it could favor Obama’s chances of winning. We need to keep those positive economic numbers coming in…
The less optimistic view is that Romney may in fact break down under the pressure and come forward with his tax documents. There are several theories about why he has kept them secret, but they are only speculation.
Also, Romney has not yet chosen a running-mate. As we saw in 2008, announcing a VP candidate can be a game-changer. (But it can also backfire, as they did for McCain/Palin). Romney will likely announce one sometime in the next two weeks.
Another possibility is that Dems will win the White House, but not the House of Reps. That will put us back in square one for four more years. I have noticed a change in Republican demeanor lately that indicates they are trying to make themselves appear to be functioning, responsible members of Congress in order to appeal to voters. (Of course, we know better, but they are putting on their best behavior to keep their leverage in the House, then it’s back to being their nasty old selves).
Finally, the debates. Obama, being always a good sport, will not likely make character assassinations to the same degree as Romney. Also, prodding Romney to get specific on his actual policies never seems to backfire on him, so there is no reason for him to change his strategy. Hence, Obama will have less ammunition if there are no details to attack.
In short, we have a good start with the polls and economic indicators, but still have a long way to go before we arrive in that positive place you describe. Too early for that kind of optimism…
Keep up the good fight!
–kensensei