Friday, November 2, 2012

Let's Do the Numbers

The October jobs report came out today, and it is better than economists expected. If you just look at the raw numbers, and don't listen to the explanation of what they mean, you might expect that things are neutral: 171,000 jobs created, 170,000 more unemployed, official unemployment up to 7.9%. Looks bad for the President, which is what Romney jumped on immediately following the release.

But that is a bit disingenuous. First of all, the report is better than economists expected. They were looking for numbers below 100K for job growth, so this is almost double their expectations. In addition, more people started looking for work, which raised the unemployment rate. Remember that the official rate only counts those who are actively looking for work as unemployed. Since more people are looking, the rate went up. It's not that 170,000 people lost their jobs. No. It means that many people had enough confidence in the job market to go searching again. That's a good thing.

Another point to make. The report also indicates that numbers from previous months have been increased from their original estimations, meaning the average rate of job growth for the third quarter of this year was 170,000/month. Not bad at all. Consumer confidence has also risen. Very good.

And here are some more things to consider going forward. The housing market is showing signs of growth, with more sales, increasing values, easier credit, and more construction. All very good signs. Then, there's the potential from Hurricane Sandy recovery. That clean-up will include renovation and construction for millions. Dozens of towns, not to mention NYC, will need people to clean the place up, and rebuild. That will all mean jobs (paid for by the GOVERNMENT). People have been complaining about the response to the hurricane. The response? Really? Because as far as I can tell, no one who is directly affected by the storm is complaining about the response by the government, not even those who dislike the government.

So, the job report looks good. It will be critiqued, criticized, applauded, dissected, misrepresented, distorted, and analyzed beyond the point of recognition, but it's hard to say what its impact will be on the race. There are a lot of strong signs, though, and many experts are saying that we are starting see things come back a bit. It's still early in the going, and there are a lot of factors to consider, but we can rest assured that things are getting better, no matter how much pundits want us to think otherwise.

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