Today’s weekly report on new unemployment benefit claims was good news for the economy, breaking a string of mediocre reports.
Tomorrow is the Big Enchilada, the monthly employment report, and the forecasts are that the news will mostly be bad.
Meanwhile, Gallup’s job creation index is posting stronger employment numbers that seem out of sync with what’s expected tomorrow.
What to think? How should election-watchers be processing all of this seemingly contradictory economic news?
Here’s the key: Trends matter. Single numbers don’t.
Barring some unexpected major event, nothing will matter more to the outcome of the November election than how the economy is perceived.
But here’s what you should keep in mind when making sense of each new bit of economic news: It doesn’t matter who wins each individual news cycle over the economy. Instead, each economic report should be seen in the context of all the economic reports. And remember that economic data is subject to major revisions, often large enough to completely change the initial interpretation.
What to do? There’s no general index of economic conditions out there to refer to, the way that we can use the various polling averages as a reality check against which to judge individual polls that seem like outliers. But at least try to see overall trends, and try not to be distracted by isolated data. I’ve found Steve Benen’s big-picture jobs and unemployment charts quite useful; here’s his weekly chart of jobless claims, updated today.
The natural tendency of political reporters is to turn each piece of economic news into yet another one day winners-and-losers story. But what really matters is the larger impression that voters wind up forming about economy’s performance and overall direction. Individual economic reports do contribute to that larger impression, so we don’t want to discount them completely. But the real challenge is to understand what we’re learning about the economy as a whole, and the broader conclusion the voters who are only just tuning in to election coverage are drawing about it.