The November jobs report and the 2010 midterms

December 4, 2009

A few thoughts, sports fans:

1)  The drop in the U3 rate is welcome news for the WH, congressional Dems (and US workers, of course). But it is really just a smoothing out of last month’s weird pop from 9.8 percent to 10.2 percent. As Action Economics notes:

The jobless rate also fell by a welcome two-ticks, to 10%, though this just reversed half of the surprising four-tick October pop to leave intact the recent uptrend of roughly 0.1% per month for this measure. We now assume a flat payroll figure in December, with the resumption of positive payroll growth in Q1, but we still expect a modest up-trend to remain in place for the unemployment rate.

2) That being said, there was certainly good news in both temporary hires and hours worked — though if the labor force participation rate had stayed steady, U3 would have been 10.1 percent.

3) But economics is one thing and politics another. The U3 rate is an ugly indicator to Americans that the economy is still broken.

4) Still a quite good chance that on Election Day 2010, unemployment for over a year will have averaged in double digits. This is virgin territory for political forecasters, and the single biggest reason why 2010 may be more like 1994 (incumbent Ds lose 52 House seats) than 1982 (Rs lose 26 seats). Average the two and you get a loss of 39 House seats — not a bad guess for a U-shaped recovery.

3 comments

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It’s beginning to look like the only big domestic change Obama could get is health care. Health care is undeniably huge, even without a public option, but a year ago, his supporters probably expected that would only be the start, and then they could move on to cap and trade, card check and industrial policy. Obama is probably going to have to be like Bill Clinton if he wants to get anything done after 2010.

well we all know what your cheering for? wanna bet your 39 number is wrong? I will take the under.

Posted by Chi Democrat | Report as abusive

hey, charlie cook has 15-25 (and 3-5 senate seats) as a conservative case …if its 35, hardly a shocker

Posted by James Pethokoukis | Report as abusive