- One bad month is unlikely to change the election trajectory
- White House says other data show a sound and growing economy
A dismal May jobs report that saw employers add just 38,000 workers to payrolls -- the fewest since September 2010 -- is prompting new questions about whether an economic slowdown could ruin Democrats’ ambitions to retain the White House.
Republicans quickly seized on the report, which fell far short of the 160,000 median new jobs forecast in a Bloomberg survey of economists, to hammer the president’s economic record.
Donald Trump, the presumptive Republican presidential nominee, called the report a "bombshell" and "terrible" on Twitter. And Republican National Committee Chairman Reince Priebus said the news was evidence that Trump, "a successful businessman who knows what it takes to create jobs and get our economy back on track," should be elected.
"This devastating jobs report showing the weakest hiring in five years is the latest indication we need to move away from the failed Obama policies Hillary Clinton is promising to continue," Priebus said in a statement.
White House aides urged caution, arguing that despite May’s disappointing numbers, the economy is healthy. Jason Furman, the chairman of the president’s Council of Economic Advisers, said in a statement that it was important to view the report in the context of other, positive trends, including upticks in consumer spending as well as vehicle and housing sales.
Momentum, or Not
Labor Secretary Tom Perez, speaking in an interview with Bloomberg Television, said that a monthlong strike by Verizon workers reduced the employment figures. And White House Press Secretary Josh Earnest said the administration remained eager for the election to serve as a referendum on the economy.
"Are we going to build on the momentum our economy has built up, or are we going to tear it down?" Earnest said in an interview Friday on CNBC.
One month of poor jobs data -- particularly more than five months before the general election -- is unlikely to have a significant impact on the presidential race.
There is little historical correlation between unemployment figures and presidential elections. Obama won re-election in 2012 with the unemployment rate at 7.9 percent, the highest of any incumbent president since Franklin D. Roosevelt. Vice President Al Gore, however, was unable to secure Democrats a third consecutive presidential term in 2000 despite the unemployment rate falling from 5.3 percent to 3.9 percent under Bill Clinton.
There were also elements of the May jobs report that Democrats can highlight. The overall unemployment rate dropped three-tenths of a percent, driven largely by declining labor participation. And wages, which have remained persistently flat during the Obama administration, gained two-tenths of a percent.
Wages are on pace to improve 2.5 percent on a year-over-year basis, said Ted Wieseman, an economist with Morgan Stanley, in an e-mail. "That’s showing a slight acceleration from 2.3% a year ago and 2.1% two years ago and we expect to see a mild further acceleration to 3.0% in 2017," he said.
The poor job numbers could also stave off an interest-rate hike from the Federal Reserve, which otherwise might squeeze economic growth over the summer.
Still, if hiring continues to sputter throughout the summer, or other segments of the economy start to show distress, concerns will grow among Democrats. The numbers also underscore the continued vulnerability of the American economy following the Great Recession.
"Net-net, the outlook for the economy is looking a little more cloudy today," said Chris Rupkey, chief financial economist for Bank of Tokyo-Mitsubishi UFJ Ltd. in New York.
Polling data also indicates that the issue is ripe for Republicans to exploit.
A Quinnipiac University poll released earlier this week showed Trump entering the general election with an advantage on job creation. While Clinton led Trump overall in the poll, 52 percent of respondents said Trump would be better at creating jobs. Just 41 percent said the same of Clinton.
And an NBC News/Wall Street Journal poll released last week gave Trump a 47 percent to 36 percent advantage when respondents were asked which candidate would be better at dealing with the economy.
The White House signaled even before Friday’s job report that it was seeking to improve impressions of the president’s economic record ahead of the election. During a speech in Indiana on Wednesday, Obama argued that the "story that Republicans have been telling about the economy is not supported by the facts" and that the American economy was "the strongest, most durable economy in the world."
His speech, which included some of his most explicit criticism of Trump to date, also argued that only a Democratic successor could continue to build on his economic progress.
"If what you really care about in this election is your pocketbook; if what you’re concerned about is who will look out for the interests of working people and grow the middle class, then the debate isn’t even close," Obama said.