Friday, September 7, 2012
More Crappy Jobs Numbers
Unemployment goes down from 8.3% to 8.1%, but the economy only added 96,000 jobs.
There were hints of a better number yesterday.
I was talking to my students about causation vs. correlation.
If 96,000 jobs is not enough to drop the unemployment rate (and it's not), why did it fall?
The conventional wisdom is that people have simply given up hope. And that's certainly part of it. If you're not looking for work, you're not technically unemployed.
But there are also two other things at work, one demographic and the other politically.
First, the Baby Boomers are retiring, or they've given up finding that part-time job in retirement. Structurally, unemployment rates will continue to fall as the Boomers leave the workforce. Yes, Social Security and Medicare will be stressed, but the unemployment numbers will look better and eventually that could lead to an increase in wages.
(As an aside, China's One Child Policy will also lead to this sort of demographic shift, which will in turn begin to price Chinese labor higher. But not for about 15 years.)
Second, I'm beginning to wonder if the unemployment figure is baked into the political race already. In 2008, I kept hearing about people who were worried about a "Bradley Effect" in the polling. Didn't happen. Because voters had a legitimate alternative in McCain. They weren't "voting against the black guy", they were voting FOR McCain. I think that's now the accepted wisdom: It's baked in.
A lot of the unemployed are the young, African American and Hispanic. For any number of reasons, these groups are not going to line up behind Mitt Romney. At these point, we have come to "accept" 8% unemployment and high gas prices. We've normalized it.
Again, this was referenced in Obama's speech last night, although these number do undermine the case.
But at this point, I think we have come to expect mediocre job numbers. Still, it will be interesting to see where the polling is next week.