George and the Jobs Report
By Bruce Nussbaum
All eyes will be on George W. Bush on the evening of Sept. 2, as he gives his acceptance speech to the Republican Convention in New York. But however skillfully written and however adept the delivery, its impact will be influenced by an event few are paying much attention to -- yet. On the morning of Sept. 3, about 12 hours after Bush says goodnight on TV to GOP delegates and the nation, the federal government will release the August employment report.
Anything under 100,000 new jobs created could hurt Bush and undermine his convention message of being the best Presidential choice to bring safety and prosperity to all Americans. Anything over 200,000 will likely help bolster Bush's claim for four more years.
The August jobs numbers are critical because they'll follow a surprisingly weak July report. In that month, only 32,000 jobs were created, a fraction of what economic and political pundits were expecting. Just as bad, the June numbers were ratcheted down as well.
A weak result for August may make it impossible for Bush to avoid being the first President since Herbert Hoover to preside over a decline in jobs during his tenure. This is political dynamite that could reverberate in a number of tight races in battleground states, with Ohio and Pennsylvania perhaps the most important.
Another measure of jobs, the Household Survey, did show a big pickup in jobs in July -- 629,000. But even Federal Reserve Chairman Alan Greenspan has said publicly that this gauge isn't a very good measure of employment. The payroll report is much better, he has told Congress.
Most analysts are expecting strong results for August -- close to 200,000 new jobs created (see BW Online, 9/1/04, "A Late Summer Lift for Jobs?"). So if the payroll number comes out weak and Republican supporters trot out the Household Survey numbers, don't believe it. The stock and bond markets certainly won't. And voters may not either.
Nussbaum is editorial page editor for BusinessWeek in New York