As another presidential election rears into view, spare a thought for campaign operatives on the eve of the first Friday of each month. Aids accustomed to surviving on minimal sleep struggle to survive on even less. Press releases and attack phrases are carefully thought out.
On hundreds of laptops and phones, the Bureau of Labour Statistics website is repeatedly refreshed as the clock approaches 8:30 am, until it eventually lands on a 40-page statistical release called The Employment Situation.
The monthly jobs report is frequently cited as a trustworthy gauge of the US economy’s state. But in the latter stages of an election campaign, examination of its contents usually takes a whole new turn.
“I cannot tell you the anxiety that you feel the night before, and that morning,” said Teddy Goff, digital director for Barack Obama’s re-election campaign in 2012, Guardian reported.
“As polling day neared, and each jobs report rolled around, there was a palpable fear that one bad month could take the entire enterprise down. Had there been a fluky month in October 2012 of negative growth,” said Goff, while adding, “you’re thinking, ‘OK, cool, we’ve just lost the White House.”
Thus, staff members of Donald Trump and Kamala Harris anxiously awaited the release of the most recent official job data as the first week of September came to an end. August saw a decrease in the unemployment rate from 4.3% to 4.2% as employers added 142,000 jobs, which was less than anticipated.
Every side launched an attack. With nearly 16 million new jobs created since he and Kamala Harris took office, Joe Biden celebrated “historic gains” for American workers. The Trump campaign said that “warning lights” were flashing, as “fears of Kamala-induced recession” allegedly increased.
Dozens of news outlets reported on the release – and what it could mean for the election. But does it matter?
“I don’t think there’s any voter who should change their vote based on Friday’s release, with the possible exception of the 12 voting members of the Federal Reserve’s rate-setting policy committee,” Jason Furman, who served as chairman of the council of economic advisers under Barack Obama said.
“If you stopped the average person in the street, they would have no idea” how many jobs had been created, or how many people were out of work, in any given month, observed Stephanie Kelton, a professor of economics and public policy at Stony Brook University.
“And even if they did, people are not moving between camps because of a tenth of a percentage point shift in the unemployment rate,” she added.
That being said, anything can change the momentum of a campaign.
“When you’re in an election that’s basically tied, even very small events could be the difference between winning and losing, In terms of economic data, there are really a very small number of big events between now and election day,” Furman said.
A third-quarter GDP economic growth estimate, two more jobs reports, and two updates to the consumer price index, the widely followed measure of inflation, will all be released between September 10 and November 5, when tens of millions of Americans will cast their ballots. Experts will analyse, discuss, and go into great detail about each.
Right before the American election shifts into full gear, the largest economy in the world has reached a critical turning point.
Aiming to cool the economy and slow price growth, policymakers acted quickly after inflation shot up to its highest level in a generation two years ago, raising interest rates to a two-decade high in the process.
The Federal Reserve Chair, Jerome Powell, has hinted that rate cuts will begin as inflation is now returning to more normal levels. He acknowledged that there are more “downside risks” in the US labour market today.
The concerns regarding the upcoming stage were exposed in August 2024 when the global stock market experienced a brief but intense sell-off due to unsatisfactory jobs data from the previous month.
Even though the jobs report was better than anticipated, it received more negative attention due to the sell-off, which made headlines worldwide.
Although the United States economy has recovered remarkably from the COVID pandemic’s lowest points, most people in the country don’t seem to realise this. According to an incorrect belief held by 55% of respondents in May, in a poll conducted for the Guardian, the economy was not in recession.
“There is a degree to which people just perceive the economy to be worse than it is. Part of it is just that the media has a bias toward negative stuff. The individual murderer gets reported on ad nauseam in the local news. The declining murder rate over the course of three decades doesn’t get any coverage. There’s that same phenomenon attached to the economy,” Goff said.
Additionally, there seems to be a disconnect between the way voters are informed about the state of the economy by official economic data and how they interact with it in their daily lives.
The Trump campaign, which claims Biden has destroyed jobs and fuelled inflation, is trying to win over people who have been directly impacted by the disruption of the economy since 2021.
How much attention would you pay to August’s nationwide unemployment rate if you, or a relative, had recently lost your job?
“Voters, particularly the voters that will decide elections, they don’t think about the economy through the prism of any government statistics,” David Plouffe, who managed Barack Obama’s 2008 campaign, told the Axe Files podcast in March.
He later joined the Kamala Harris campaign as a senior adviser.
Barack Obama entered the 2012 election with the highest jobless rate of any president to be re-elected since 1936. People felt good about the trajectory because, as Plouffe observed, “It was coming down.”
“Should the Fed start reducing rates this month, as indicated, perhaps at the margin, in the tiniest of ways, some people might start to feel better about the economy. Maybe there’s a little bit of a vibe shift in having the rate-cutting cycle begin, and knowing it’s underway,” Kelton suggested.
That feeling shift, or lack thereof, could very well determine the outcome of a race this close. There has been a gap between American words and deeds for a while now. Could the noise generated by a few positive or negative economic reports tip the scales?
“Right now when people have to put money behind their statements, they are very optimistic. They are spending lots of money. Businesses are investing a lot,” Furman, now a professor at Harvard University, said.
“And yet, when they talk to pollsters and no money is at stake, they are quite negative. When they get into the ballot box, will they think more like they do in a store, or when they’re talking to a pollster? No one knows,” he concluded.