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.