Opinion: Columnists

Two reports, two parties, two economic realities

|
Photo - Hundreds of job applicants attend the DeSoto County Job Fair at Landers Center, Tuesday, Oct. 9, 2012, in Southaven, Miss. (AP Photo/The Commercial Appeal, Stan Carroll)
Hundreds of job applicants attend the DeSoto County Job Fair at Landers Center, Tuesday, Oct. 9, 2012, in Southaven, Miss. (AP Photo/The Commercial Appeal, Stan Carroll)
Opinion,Conn Carroll,Columnists,Campaign 2012,Politics Digest

"Mr. President, you're entitled to your own airplane and your own house," Mitt Romney said at the first presidential debate in Denver earlier this month, "but not your own facts."

This play on the late Sen. Daniel Patrick Moynihan's famous quote, "Everyone is entitled to his own opinion, but not to his own facts," is normally true. But not this month. Not when it comes to economic facts at least.

On the first Friday of this month, the Labor Department published results from two surveys that depicted two completely different economic realities in the United States. Which report Americans choose to believe will go a long way in determining who will win the election next month.

The report most favorable to President Obama, the Bureau of Labor Statistics' Current Population Survey (aka the household survey), found that 873,000 Americans got new jobs last month. That is the most jobs created ever reported by the household survey since 1983. And it is the sole reason the nation's unemployment went from 8.1 percent down to 7.8 percent.

How credible is that 873,000 jobs created number? As Wells Fargo analysts noted, September's supposed household survey jobs gain was "more than four times the size of the average change over the past 12 months." The last time the U.S. economy created that many jobs, in June of 1983, the economy was growing at 9.3 percent. Today, GDP is growing at just 1.3 percent.

Wells Fargo referred to the 873,000 jobs growth number as "a black swan outlier." Gallup's chief economist, Dennis Jacobe, said the household survey "seems to lack face-validity." This is what economic experts are saying about the economic report that Obama is using to make his closing argument to the American people.

Meanwhile the report less favorable to Obama, the Bureau of Labor Statistics' Current Employment Statistics program (aka the employer survey), showed just 114,000 jobs created in September. Not only was this report almost perfectly in line with what analysts were expecting, it was also consistent with what other economic indicators have been showing: Instead of getting better, the U.S. economy is actually getting worse. (For reference, when the household survey showed nearly a million new jobs were created in June 1983, the employer survey did not diverge nearly as much, pointing to 418,000 new jobs.)

Since the economy stopped losing jobs in October 2010, we have been averaging 150,000 jobs created per month, according to the employer survey. But over the last six months, job growth has slowed to just 106,000 jobs a month. The Atlanta Federal Reserve estimates that we need 100,000 new jobs a month just to keep up with population growth. That means if the current rate of weak job growth continues, roughly 8 percent unemployment is the new normal. Worse, if the rate of net job creation continues to slow, as it has been doing for months, unemployment will tick up again.

So which report should voters believe? The household survey, showing rates of job creation not seen since the height of the Reagan recovery? Or the employer survey, showing the U.S. economy slowly sinking into another recession?

Democrats have clearly decided to trust the household survey data. According to Gallup, consumer confidence has skyrocketed to prerecession levels ... but interestingly, only among Democrats. Consumer confidence among Republicans and independents is actually falling. And with good reason.

If Obama is re-elected president, the American people are facing a $500 billion tax hike starting Jan. 1, which the Tax Policy Center estimates would translate into a $3,500 tax hike for the average American family. The payroll tax hike alone, which Obama and the Democrats have specifically said they will let happen, would take $1000 a year from the average American paycheck -- from the poor and rich alike. The Congressional Budget Office predicts that these tax hikes, along with $100 billion in scheduled spending cuts, would cause unemployment to shoot back up above 9 percent.

That's economic reality no American wants to be part of.

Conn Carroll (ccarroll@washingtonexaminer.com) is a senior editorial writer for The Washington Examiner. Follow him on Twitter at @conncarroll.

View article comments Leave a comment