For political junkies, jobs day — we'll get the latest unemployment numbers tomorrow — has become a hugely hyped event. In part that's a good thing. It's good that everyone realizes that presidential elections are in large part (if not entirely) decided by economic performance.
But the hype around this one metric really has gotten out of hand, as far as electoral effects are concerned. Remember: general impressions of the economy matter, but it's not as if undecided voters are on the edge of their seats waiting to see whether 110,000 or 90,000 jobs were added last month and then checking off their vote choice. Let's see...Jared Bernstein guesses 90,000 and says that the consensus expectation is a bit higher than that. I'll say that anything between 50,000 and 150,000 is not a very big deal politically, and it would take either an actual negative number or something over 200,000 to really shake things up.
The last couple of reports before the election might move short-term news coverage enough that they could make a difference. But it's far too early for that, and besides it's August, and mid-Olympics, and most people will hardly notice if it's a status quo number. There’s another piece to it, too. Previously, we were interested in not just what the monthly number told us about what happened during the month in question, but more importantly in what it signaled about the future. The closer we get to the election, however, the less the long-term and even the medium-term future matters (as far as electoral effects are concerned). So, again, unless there’s something very unexpected, we’ll learn little about how the economy will be doing in September and October that we don’t already know.
We all know what we're looking at by now: an economy which is far too weak to assure Obama of an easy re-election, but strong enough that it doesn't make him a sure loser. Anything within a very wide range would basically only reinforce that dynamic. So, sure, we're all going to watch the numbers tomorrow because we do that sort of thing. But unless there's a really large change in one direction or another, I don't expect any real effect on the presidential election.