The September employment report is the political Rorschach test
Final employment report before the presidential election hereThe number of employed persons in September increased by 661,000 from August, and the unemployment rate fell to 7.9%.This is a slight but not great improvement last month, When the unemployment rate is 8.4%. (Compare the 0.5 percentage point decrease in this report with the 1.8 percentage point decrease between July and August.)
Therefore, entering the fall, the employment situation is better than that in the spring and summer, but the recovery has also slowed down significantly. With less than five weeks to go before the general election, how much influence does this have on the odds of President Trump or former Vice President Joe Biden?
Even in a normal year, our election analysis will be View work report As Just one of many economic indicatorsBut this year is even stranger than previous years, because there is a Rorschach test element in the report-people of different political inclinations can see what they want to see.
Historically, the employment report released shortly before the election has been a reasonable indicator of how the current party will perform, although the last employment report of the cycle may not be the most reliable.In the 18 presidential elections since 1948, the unemployment rate in September before the election has reached Not relevant The ultimate universal suffrage advantage with the incumbent party. However, when you compare the September figure with the previous months (especially the first 6 to 12 months), it has historically been a stronger predictor of election success for the current party. (Although if you take the unemployment rate too far, the correlation will disappear.)
This shows that voters are most concerned about the trend of the unemployment rate in the six months to one year before the election, and blame the current party for this trend.
Under normal circumstances, all this is fine. But, of course, 2020 is far from normal. What the current economy means to Trump is unclear. In absolute terms, the unemployment situation seems terrible for incumbents; the unemployment rate in September was 7.9%, the highest level since at least 1948. (7.8% in September 2012.) But the situation could be worse-the situation has been improving steadily in the past few months, and the unemployment rate in September was below 6.8 percentage points In aprilTherefore, even if looking at these numbers in a vacuum may be bad, the fact that the unemployment rate is moving in the right direction may be good news for Trump.
These different explanations may be why Americans of different political classes have completely different views on the economy. According to Civiqs polls, In the brief moments at the beginning of the pandemic, there was no Such There is a huge gap between Republicans and Democrats in how they view the economy. But since then, the gap has widened greatly. A poll conducted at the end of September found that 80% of Republicans believe that the economy is at least in a pretty good state, while the proportion of Democrats is only 8%.
This disharmony may be related to two completely different ways of looking at the employment situation: Are you concerned about the absolute level of the unemployment rate? Or do you stick to the trends of the past few months? Depending on the lens you choose, you see a completely different economy. If you only look at the past three or four employment reports, the country seems to be moving steadily towards economic recovery. If you look at the changes in the past year, the unemployment rate still appears very high.
The problem is that neither statement is wrong, to be precise-it is true that workers are returning to work Much faster than economists initially predicted, with Indeed, tens of millions of Americans are still unemployed. But in general, it does not convey a very clean political message-that is why Republicans and Democrats can view this employment report separately, and see good news for their candidates, and for their The opponent sees bad news.
“Republicans pay attention to these changes every month and say, “We are creating millions of jobs every month; we are getting the economy back on track,”” Andrew L., chief economist at the job site Glassdoor Chamberlain (Andrew Chamberlain) said. “And someone on the left said:’There are still millions of Americans unemployed, and our employment in April, May and June has undergone a depression. ‘” Partisanship is a poison, and both have ample opportunities for all parties to turn this latest employment report in whatever direction is best for them, which may make any historical comparison irrelevant.
What is even more difficult to explain is that the unemployment rate is only one of many factors to be considered when assessing the country’s economic situation before entering the elections.
in Our election prediction model, Wage work Be included As part of the economic picture that contributes to the overall forecast. But we have also included many other economic indicators, some of which are currently moving in the opposite direction.
That’s because this is a Really weird recession: Millions of people are unemployed, but Savings with income It has remained high for several months, at least in part because of the federal replenishment of people’s unemployment checks.It’s gone now, but Expenses are still a lot Although income has fallen a bit.with Don’t even talk to us about the stock market, Despite other economic turmoil, but still rising this summer.
Therefore, from the perspective of the election model, the economic situation has improved since June, and we are basically at an average economic level—despite employment Still bad In a historical sense.
According to Nick Bunker, head of North American economic research at the Indeed Recruitment Lab, a research organization linked to the job site Indeed, the last question is that the situation may still change between now and election day.The employment report in October this year will be released within three days Rear election. (It needs to be clear: the Bureau of Labor Statistics, the federal agency that produces employment reports, Didn’t do it deliberately.) “In a normal year, you would not expect the economy to change drastically in a month and a half,” Bunker said. But in the next five weeks, everything is possible.Considering some voters Already votingAny change in October means that Americans who voted early may choose the president in a completely different economic reality than those who voted on November 3.
All of this means that it is unclear whether the employment report will help or hurt any candidate. In the end, it may be just a wash. after all, Few voters hesitateThe most important thing of this report is to remind people why Republicans and Democrats may view the economy in completely different ways.