Potentially Bad News For August Jobs Report

A mid-month survey from Gallup portends some potentially bad news for the August jobs report that will come out just days after the Democratic National Convention ends:

Gallup’s Daily tracking of the unemployment situation is based on interviews with more than 30,000 adults over the 30 days ending Aug. 15, and shows essentially no change in the unadjusted unemployment rate at 8.3% compared to 8.2% in July. In turn, this suggests that the government’s unadjusted unemployment rate could increase to 8.7% in July from 8.6% in June. The government’s measurement of the unadjusted unemployment rate has been known to differ with Gallup’s findings, but a drop of 0.3% in July is necessary to bring the government’s unadjusted rate down to Gallup levels.

More interestingly, there were no BLS seasonal adjustments in August 2011. If this remains the same in 2012, the Gallup seasonally adjusted unemployment rate for August would be 8.3% while that of the BLS would be 8.7%, assuming a similar increase to that shown in the Gallup data. Further, Gallup’s data show the labor force participation rate to be increasing in August. In turn, that could have an additional negative impact on the unemployment rate for August if the government’s data show a similar pattern.

(…)

Regardless, barring heroic adjustments or a sharp change in direction, Gallup data suggest the seasonally adjusted U.S. unemployment rate for August will increase — possibly substantially — when announced in early September.

A two or three tenths-of-a-point increase in the unemployment rate two months before the election would obviously be bad news for the Obama Administration, especially if it comes right as the final drive to November is beginning.

FILED UNDER: Economics and Business, Quick Takes
Doug Mataconis
About Doug Mataconis
Doug Mataconis held a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May 2010 and contributed a staggering 16,483 posts before his retirement in January 2020. He passed for too young in July 2021.

Comments

  1. Give me some insight into your “bad news all the time” campaign. I know you are selective in your economic news, but you’ve also said that you don’t think a President can change much.

    Does it just come from a political perspective that bad news will affect the election regardless?

    And then whoever’s elected, they’ll have little control, until the next election?

  2. bk says:

    If only Obama didn’t keep vetoing all of the jobs bills that originate in the Republican-dominated House and are allowed to pass the Senate by a simple majority vote, we’d be doing a lot better. Wait….

  3. John,

    When was the last time we had good economic news?

  4. Oops, the second link should be to this.

  5. @john personna:

    And yet we have GDP reports that show the economy growing under two percent, and no analyst (including the Fed and the CBO) who thinks its going to get any better over the next 6-12 months.

  6. @Doug Mataconis:

    I think you are making a slow, distancing, argument. I don’t think you are being real or engaging.

    A real argument would engage with the global slowdown, the approaches various nations are taking in the face of it, and the relative success of the US strategy.

    It is a child’s, or a sophist’s, argument to simply say “hey, things aren’t perfect!”

  7. Seriously, look at the first “Figures show” charts above. The US and Germany are the two stars.

    And we had higher growth than Germany last month.

  8. Bill says:

    This isn’t bad news. What it is- Lies. The real unemployment rate is more like 15% or worse. Our current political officeholders I’m afraid are like the Soviet leaders of the 70’s and 80’s. They have come to believe their own lies.

  9. @john personna:

    Fair point, but the fact that we’re doing better than the weakening economies of Europe is small solace. And, if Europe plunges into recession it’s going to end up biting us in the ass anyway. Same goes for China.

  10. rudderpedals says:

    Austerity during a depression is a really bad idea. Who could have guessed that? Damn shame no one saw it coming.

  11. al-Ameda says:

    America is experiencing anemic growth, yet it is growth and not recession. There is not much the administration can do about the failing economies in the Eurozone.

  12. @Bill:

    Neither party wants to talk about U6 unemployment, nor about two long term drivers: globalization and automation.

    A really great story on the automation here, also dropped in the iPod thread.

    Maybe Obama will make oblique references to globalization and tax breaks to bring jobs back, but I think that’s really window dressing. Not to mention it’s the old carrot-not-stick thing. A small and non-protectionist tariff would be a more serious answer.

  13. anjin-san says:

    @ Doug

    When was the last time we had good economic news?

    That would be Friday.

    The Dow closed at 13275.20 on Friday. Do you have any money in the market? Like countless millions of Americans, I do. I believe that is a 4.5 year high. It was at 8,279.63 the day Obama took office – that means the mind numbing losses incurred under Bush have been regained.

    Do you know what “good news” means? Hint, it’s not “something happened that makes Obama look bad”…

  14. The Dow doesn’t tell us much about GDP growth or unemployment. What it tells us is that investors consider American stocks and bonds a better investment than other overseas markets. We’re doing marginally better than the rest of the world, that’s all. At our current growth rate, it would be 2025 before we’d be completely recovered from the 2007-08 recession

  15. anjin-san says:

    @ Doug

    The Dow doesn’t tell us much about GDP growth or unemployment.

    When was the last time we had good economic news?

    The answer is… Friday.

    Let’s leave the goalposts where you set them.

  16. @Doug Mataconis:

    So did you answer my original question? You seem determined to find “better than everyone else” to mean “badly.”

    Is that because you think it will ding Obama?

    And do you think Romney has a better plan?

  17. @this:

    What idiot down-votes good news? And why?

  18. Commonist says:

    “The Dow doesn’t tell us much about GDP growth or unemployment.”

    It’s almost as if trickle-down doesn’t work.

  19. KariQ says:

    @Doug Mataconis:

    When was the last time we had good economic news?

    Well, let’s see. This week, we’ve had increased retail sales, increased industrial production and capacity utilization, slowing inflation (although that’s not necessarily a good thing most people seem to think it is), 4-week initial unemployment claims are near post-recession lows, and consumer sentiment increased. That’s just this week.

    Also, housing is starting to make a positive contribution to the economy for the first time since 2007, and that’s a major milestone.

    Granted, it’s not all sunshine and roses, but all of these things are positives and indicate at worse that we are likely to continue seeing slow growth.

  20. Ben Wolf says:

    @KariQ: Things that happen “this week” are statistically irrelevant. In the worst of the Great Depression there were occasionally good months.

    We continue to suffer from economic mismanagment by the White House and Congress. Both Romney and Obama are doing their damnedest to talk down the economy by blathering on about spending cuts/tax increases and a non-existent public debt problem. Obama will be re-elected because Romney/Ryan are a godawful ticket, not because he’s done a great job. We’ve had almost two years now of nearly zero real GDP growth. Good for stocks because deficits directly support corporate profits, not so great for small businesses and workers.

  21. john personna says:

    @Ben Wolf:

    I fault the right when they blame Obama for Congress.

    I’ve started to think “it’s the Congress, stupid.”

  22. john personna says:

    (That said, it would be a very different Congress that would vote the Wolf budget.)

  23. KariQ says:

    @Ben Wolf:

    You’re responding to an argument I wasn’t making. Doug asked about the last time we had positive economic news, and my response was to list the positive economic news we had in just the past week.

    No one’s saying the economy is roaring, but we are continuing to have the slow but consistent economic growth that is usual following a banking and fiscal crisis. That’s not ideal, but it doesn’t justify the “DOOOOM!” tone that Doug has in so many of his posts on the economy.

    Given an ideal environment, would Obama have responded more strongly to the economic crisis he inherited? I hope so. Given the environment he actually faced, I don’t know what more he could have done.

  24. Moosebreath says:

    @Doug Mataconis:

    “When was the last time we had good economic news?”

    Certainly never in a Doug Mataconis post under President Obama. Nor for that matter have we had good polling numbers for President Obama in a Doug Mataconis post. I wonder why that is.

  25. This is kind of an old thread, but I’ll add a very important study, one which illustrates why the aftermath of a credit bubble is hard:

    The Great Recession brought an end to a 20-year expansion of household balance sheets. In the recession’s wake, an active debate has sprung up about whether the decline in consumer credit was motivated by consumers’ decreased appetite for debt or banks’ unwillingness to lend.

    Our analysis shows that consumers have likely played a larger role in the credit decline than banks have. While this result could mean slower prospects for economic growth—consumers who are borrowing less could also be spending less, and spending is needed for growth—the implications of such behavior are not necessarily bad. Deleveraging of consumer balance sheets should increase private savings during a period in which saving by the public reached record lows. This should allow for more capital formation and, hence, economic growth. So as long as consumers do not dramatically reduce their spending, the rehabilitation of consumer balance sheets should not be a material drag on growth.

  26. rosenthal says:

    @anjin-san: @john personna:

    You stupid bastard. The Stock market is the worst indicator of an economy you piece of shit. Strong economies are those with unemployment under 5 percent you shit bag. Stock market had big increases in 1979-1980 too. You bitch. Ask Jimmy Carter.

  27. rosenthal says:

    @john personna:

    Hey you liberal bastard. The overall GDP is 1.5 percent. That is down from freaking 2. Trendline is headed towards negative terroritory idiot.