By the Time You Get This, You May Already Feel Depressed About the Economy
It’s the first Friday of the month, and you know what that means! Time to tune in to CNBC, watch the anchors breathe in with eager anticipation and then, at 8:30 eastern… watch everyone let out a long, slow, exhale of disappointment as the unemployment rate (probably) stays the same, or (maybe) goes up or down one tenth of one percentage point. Smart economic minds will go into the details of the numbers, point to this one particular figure which look like a bright spot and this other figure which looks really troubling, the partisans will spin their messages, every political figure will issue a brief statement that today’s troubling numbers/despite today’s improved numbers, the situation is dire and the policy proposal they’ve been touting for a year must be enacted now, blah blah blah…
You know what the whole thing means. The economy is crappy. It’s been crappy, for a really long time, and it’s probably going to remain crappy for a good long while.
“It seems that the economy is pretty much locked in to this sort of dreary trajectory,” says Stephen Stanley, chief economist at Pierpont Securities. “Conditions are not quite weak enough to suggest an outright recession, but the near-term outlook is clearly deficient.”
Jobless claims have been erratic throughout the last few weeks, largely due to temporary layoffs in the automotive industry. It’s tough to glean anything fundamental from that data heading into Friday’s report. ADP also reported 163,000 private-sector jobs were added last month. But ADP’s inconsistent history of being an accurate predictor of the government’s monthly report is well documented.
In other words, this monthly report appears tougher than usual to forecast.
James Pethokoukis shares one economic model that forecasts doom for the president’s reelection bid:
Political scientist Douglas Hibbs looks at two factors when forecasting presidential elections: a) per capita real disposable personal income over the incumbent president’s term, and b) cumulative U.S. military fatalities in overseas conflicts.
And he’s predicting a near-landslide win for Mitt Romney over Barack Obama, with Obama losing by about as big a margin in 2012 as he won back in 2008. Under Hibbs Bread and Peace model, Romney wins 52.5% to Obama’s 47.5%.
Obviously, there’s no guarantee it will shake out that way, but it’s… interesting.