Robert Reich: September Jobs Report Could Sway Election

Wednesday, 03 Oct 2012 07:55 AM

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The Department of Labor will release its September jobs report on Friday, and any unpleasant surprises could give Republican presidential nominee Mitt Romney an edge over President Barack Obama, said Robert Reich, Secretary of Labor under President Bill Clinton.

 

Jobs reports have disappointed in recent months, with August adding a net 96,000 nonfarm payrolls to the economy, below expectations, but the unemployment rate fell to 8.1 percent.

 

Unemployment rates have refused to dip below 8 percent.

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

Meanwhile, more and more out-of-work Americans frustrated with fruitless job searches are jumping out of the labor force, making jobs recovery a tougher hurdle to cross.

 

“The biggest election news this week won’t be who wins the presidential debate Wednesday night. It will be how many new jobs were created in September, announced Friday morning by the Bureau of Labor Statistics,” Reich said in his blog.

 

“Rarely in the history has the monthly employment carried so much political significance. If the payroll survey is significantly more than 96,000 — the number of new jobs created in August — President Obama can credibly claim the job situation is improving. If significantly fewer than 96,000, Mitt Romney has the more credible claim that the economy isn’t improving.”

 

One Federal Reserve official says the United States is “drowning in unemployment,” its economy is running at stall speed, though on a positive note, inflation is not a problem.

 

Jobless rates are not likely to improve any time soon due to a fast-approaching fiscal cliff — a combination of expiring tax cuts and inbound spending cuts converging at the same time, which could throw the country into a recession if Congress fails to act.

 

Interest rates might be low and credit cheap, but if businesses don’t know how much in taxes they will be paying, they’ll continue to put off expanding and hiring.

 

“We’ve had a recovery that is quite disappointing,” Dallas Fed President Richard Fisher told a group at the University of Texas at Dallas, according to Reuters.

 

“A short-term fix to the fiscal cliff will do nothing but push out the envelope of indecision and we will continue to be plagued by high unemployment.”

Editor's Note: You Deserve to Know What Obama and Bernanke Are Hiding From Americans

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