When the Labor Department publishes the latest reading on the nation’s employment situation Friday morning, it is a safe bet that reporters will not have finished printing it out before it becomes grist for election-year spin.
While the September jobs report will offer important information on the economic backdrop heading into the final month of the presidential campaign, it would be surprising if the report offered a picture of the economy that was wildly different from what recent months have shown, which is: Job creation is steady but too sluggish to bring down unemployment meaningfully over time.
Forecasters are expecting the report to show creation of 115,000 positions in September, up from 96,000 in August. The unemployment rate is projected to rise to 8.2 percent from 8.1 percent.
New data Thursday was consistent with those expectations of weak growth and glacially slow improvement in the job market. The number of people filing new claims for unemployment insurance benefits rose to 367,000 last week, from a revised 363,000, according to a Labor Department report Thursday. Factory orders fell 5.2 percent, the Commerce Department said.
But beneath the overall details of the jobs report, there have been some less obvious trends in recent months. To understand whether the U.S. economy remains in its long funk or is starting to improve, pay attention to whether these emerging trends continued in September.
Employment-to-population ratio heading the wrong direction: The unemployment rate can go up or down for reasons disconnected from the strength of the job market. For example, if workers choose to leave the workforce — giving up their job hunts out of discouragement — the unemployment rate tends to drop. But one number filters out that effect.
The employment-to-population ratio captures the percentage of Americans who were working the previous month. And it has been weakening, falling to 58.3 percent in August from 58.6 percent in June. There are demographic reasons to expect that number to decrease over time, but it’s dropping faster than would be justified by the rising numbers of retirees. If the trend continues in September, it would be a bad sign.
Spiking unemployment for those who didn’t go to college: The unemployment rate has been steady among college graduates in recent months and has fallen among those who have some college experience. But the 37 million workers with only a high school diploma are still seeing rough times: Their unemployment rate has risen from 8.1 percent in May to 8.8 percent in August.
It is a small enough sample that it could be a weird statistical quirk, but it is a worrisome sign that this group has gone from having a jobless rate roughly equal to the U.S. average to being way above it.
A falling number of long-term unemployed: The number of people unemployed for more than 27 weeks has been on a welcome downward trend in recent months, to 5.03 million in August from 5.41 million in May. But it’s not as good as that might seem. This may well be the flip side of an opposite trend of people leaving the workforce entirely. It is easy to imagine people who have been out of work for six months saying to themselves, “Forget it,” and stopping the job hunt entirely.
Local government job losses continuing but no longer a big issue: State and local governments slashed an average of 7,000 jobs from their payrolls in July and August as they continued to trim their expenses. That may sound bad, but it means the sector is bleeding at a slower pace than in the recent past. Job-growth numbers may be weak, and state and local governments aren’t adding jobs, but they are no longer a predominant reason for the weakness, as they were in 2010 and 2011.
Flat wages: American workers’ pay is going nowhere, fast. Hours are little changed in recent months. Hourly pay is little changed. Add it up, and employees are seeing no meaningful rise in their pay. Over the year that ended in August, average weekly earnings were up about $16, or 2 percent. But inflation in that span was 1.7 percent, as measured by the consumer price index. In real terms, then, the typical American worker made 59 cents more per week in August, compared with a year earlier.
Don’t spend it all in one place.
The report will be 38 pages long, give or take, and released to the world at precisely 8:30 a.m. Friday, as determined by an atomic clock. It will be titled “Employment Situation — September 2012” and will be instantly turned into campaign fodder.
If the Labor Department’s unemployment report for September turns out to be a little better than people are expecting, the Obama campaign and its supporters will cast it as evidence that their standard-bearer has gotten the American economy revving and heading toward better days. If it is a little worse than expected, the Romney campaign will surely seize the moment as the latest evidence that President Obama has failed and is leading the nation toward decline.
But, in truth, the political importance of the jobs report will be exaggerated, as it almost always is during an election year.
The details may give either Republican candidate Mitt Romney or Obama a day of good headlines. But the small differences — such as a couple of tenths up or down from the previous month’s unemployment rate, or 75,000 jobs added in September vs. 125,000 gained in August — won’t change the fundamentals of the nation’s economic picture by the time voters go to the polls next month.
Of course, the jobs report still merits keen attention. It is the best, most complete indication we have in real time of how the U.S. economy is doing. Over moderate periods of time — a few months, say — the numbers can tell us quite a lot about how fast the economy is growing, or sinking, and whether people are still looking for jobs or giving up.
There’s a wealth of information in those 38 pages. It’s about how all Americans are doing, not just the two men running for high office.