There are two other political developments today with potentially at least as much significance as the weak jobs report. To some extent, those numbers have already been “discounted” by the political markets; i.e., it is clear that the economy, from a jobs perspective, continues its weak recovery.
But jobs are not the only economic factor in the minds of voters. In addition to the beginnings of a housing recovery, any holder of a 401(k) has likely noticed that since Obama took office, the S&P is up 66 percent, and is touching all-time highs. I have argued before that the S&P average, in an age where more than 53 percent of Americans are in the market, is an under-appreciated predictor of political outcomes. The markets are super-skittish about any bad news and are, perhaps, artificially inflated by the anticipation of further monetary action, but people are feeling better today when they look at their monthly statements.
A second development: There is a disputed report that bears watching: Romney’s super PAC, led by Karl Rove, is, for now, discontinuing ad buys in Pennsylvania and Michigan. If the PAC stays dark, then this is a very significant victory for Obama because it makes easier his possible paths to an electoral college majority. Stay tuned on that one.