Luckily for the Obama administration, recent economic reports have generated sufficiently unclear results that a casual glance might suggest things are getting better. Few Americans know that, traditionally, the number of new jobs needed each month to keep up with the number of new workers entering the workforce is considered to be 100,000 to 150,000. (Some say a sustained recovery requires something closer to 250,000 jobs created per month.) Obviously, if an economy creates 45,000 jobs, as it did in June, but adds 125,000 new workers, the overall number of people looking for work goes up by 80,000 and the unemployment rate is actually higher, not lower (although the official percentage probably would remain the same, for reasons discussed below).
So some Americans may think that any level of job creation is good news. Saul Alinsky wrote: “The moment one gets into the area of $25 million and above, let alone a billion, the listener is completely out of touch, no longer really interested, because the figures have gone above his experience and almost are meaningless. Millions of Americans do not know how many million dollars make up a billion.”
And few Americans know about the “discouraged worker” factor in the statistics — the factor of the unemployed worker who was looking for work sometime in the past year but has stopped looking for work. The most recent jobs report indicated that there are 844,000 discouraged workers who aren’t counted in the official unemployment rate.The official rate is known as the U-3 figure; adding “marginally attached” workers and then adding “discouraged workers” gives us the U-4 and U-5 figures, respectively. Then there is the question of how to classify those who are working part-time but who want, and cannot find, full-time work. Technically these workers are employed, but they are likely to be struggling financially; there are 8 million Americans in this category; adding these to U-5 brings us to the U-6 figure. Finally, Paul Solman, the business and economics editor for PBS’s NewsHour
, believes that the long-term unemployed — those who have stopped looking for a year or more, but say
they want a job, a figure reaching about 7 million — should be included, in a figure he labels U-7.
If you include these groups, the number of “unemployed” booms from 12.5 million to 27 million.
The most recent jobs report was deemed gloomy news by most analysts — 368,000 people stopped looking for work, the percentage of the working-age population either employed or actively looking for work hit a 30-year low, average hours worked and wages remained stagnant. But because 96,000 jobs were created while the 368,000 people mentioned above stopped looking, the official unemployment rate, U-3, dropped from 8.3 percent to 8.1 percent. The number of jobs created and the drop in U-3 are the two figures most likely to be mentioned in the headlines, and both sound to the uninformed like good news.
From this, one might conclude that President Obama is Teflon-coated on the economic issues, floating along on a cushion of partisan loyalty and with poorly informed voters believing the economy is doing better than it is.
But it is worth noting that it is one thing to tell a pollster that the economy is doing well or well enough, particularly if the respondent interprets the question as, “How well is the incumbent you voted for performing?” It is another to contemplate the economy, and one’s prospects in it, at the moment of decision within the voting booth.
Besides having last Friday’s report on the jobs picture for September, voters will have the report for October four days before Election Day. Many of them will drive to the polls after putting $3.50- to $4-per-gallon gas in their cars. And voters will drive or walk past empty storefronts and homes with foreclosure sale signs on their lawns, as the foreclosure rate is only slightly below last year’s 17-year high. The Federal Reserve reports that Americans have put more into their savings accounts than at any time since the Fed began measuring the savings rate in 1945, and are putting off major purchases — indicators of deep caution and uncertainty about their economic futures.
The responses to the “Is the country on the right track or headed in the wrong direction?” question remain strongly negative, well beyond the normal partisan split — suggesting that some respondents who claim to believe the economy is getting better still feel in their gut that we’re sliding toward some dire fate. In the GWU/Battleground poll, two out of every three independents think the country is on the wrong track.
The responses to the question about the country’s direction suggest that partisan loyalty and cheerful headlines about jobs reports can shape a voter’s perceptions of the economy quite a bit — but even those phenomena have their limits.
— Jim Geraghty writes the Campaign Spot on NRO.