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.

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IFM Correspondent

October 27, 2016: That banks in the US cozy up to politicians is known to all. However, a study by Bloomberg shows that it is no longer just Wall Street, but also Silicon Valley which is getting into political lobbying.

Bloomberg has stated that the five largest technology companies in the US – Apple, Amazon, Google, Facebook and Microsoft – spent more than twice as much on lobbying in 2015 as the five largest banks – $49 million versus $19.7 million

During the Obama administration, the technology industry has gotten close to Washington. In fact, it was during Obama’s administration that the government’s first chief technology officer — Megan Smith – was appointed. Smith was earlier a manager in Google.

Today the five big tech companies are the biggest firms in the US by market value. When Bloomberg asked Google about this, the company responded: “We help policy makers understand our business and the work we do to keep the internet open and fuel economic growth.”

Facebook stated that its goals in the capital include protecting customers, “explaining how our service works, and maintaining an open Internet and a culture of innovation”.

Further, it was stated in Hillary Clinton’s leaked email that Apple’s chief executive officer Tim Cook and Microsoft founder Bill Gates were on a list of Clinton’s potential vice-presidential nominees.

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April 26, 2016: Barack Obama, in possibly his last visit to the UK as US President, warned that it could take up to a decade for Britain to strike a deal with America if Brexit becomes a reality.

At the end of his three-day visit, Obama said it was wrong for Brexit campaigners to suggest it would be straightforward to agree to a new trade relationship if Britain left the EU.

Obama told the BBC that Britain would not get preferential treatment over the EU when it came to negotiating a new trade deal. He said, “The UK would not be able to negotiate something with the United States faster than the EU. We wouldn’t abandon our efforts to negotiate a trade deal with our largest trading partner, the European market.”

He added that he does not expect his comments to influence or change the mind of hardliners but ‘normal people who care what the President of the US thinks about Brexit’.

His comments came as US presidential hopeful Hillary Clinton also threw her weight behind the campaign to keep Britain in the EU in a major new boost to UK Prime Minister David Cameron’s remain campaign.

Understandably, the US intervention has left many leave campaigners angry. According to the group, Britain can easily negotiate better terms outside the EU.

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September 10,  2013 : In the early 1990’s America experienced a bout of recession due to the moves by the U.S. Federal Reserve to raise interest rates and Iraq’s invasion of Kuwait in the summer of 1990, the American housing market collapsed as a result of which banks that specialized in home mortgages went bankrupt, during this period “Time” magazine featured Alan Greenspan, Robert Lubin and Larry Summers on its cover and called the “three man army” as the “Committee To Save the World”. Now, more than a decade later, Summers is poised to take over from Ben Bernanke as the Fed Chairman, Bernanke’s term expires this January and Lawrence Summers or Larry Summers as he is known is Obama’s choice to take over the most coveted administrative positions in the world.

In March 2009, a newly elected Barack Obama faced a dilemma to bail out the Auto giant Chrysler or let it go bankrupt, the President opted to consult Lawrence Summers, then National Economic Council director who explained with no equivocation the implications to the U.S. economy if the auto major was not bailed out by the government, Obama was convinced by the explanation and Chrysler received $ 12.4 billion in tax payer’s money that helped to save the company and thousands of jobs. Whitehouse officials describe the relationship between Obama’s bond with Summers to that of a patient with a doctor who helped him survive a heart attack or soldiers who have served the battle together.

Summers Vs Yellen or Inflation Vs Unemployment

According to media reports, Obama administration is considering appointing Mr.Summers as the next chairman of the Federal Reserve, but another candidate, considered for long to take over the reins from Bernanke is  Janet L. Yellen, according to an article published in the New York Times last week, Obama is keen on keeping inflation in check, Yellen on the other hand has been quoted in the past saying the Fed’s priority should be on reducing unemployment, even if that causes inflation to rise slightly above the expected levels.

David Forrester, a forex and fixed income strategist at Macquarie Bank says “Yellen is a Fed insider and a part of the Federal Open Market Committee (FOMC) when Q.E was being implemented, while Summers questions the efficacy of QE” he said, while adding that there was likely to be a structural shift in U.S. monetary policy if Summers is appointed as the next Fed chairman.

Janet Y Yellen is the “dark horse” to head the chair and analysts argue that she might not “fit in” with the scheme of things in Obama’s financial team. However, there is severe pressure on the American President to appoint more women to senior positions, her experience in the treasury and her gender will add to her chances of heading the Fed.

Conflict of Interest

Commenting on the crashes in the stock markets, Summers once quipped “Global capital markets pose the same kinds of problems that jet planes do. They are faster, more comfortable and they get you where you are going better. But the crashes are much more spectacular”

Critics opine that Summer’s Wall Street ties will be detrimental and will create suspicion whether he is the right man for the job, currently he is serving as a paid consultant to Citigroup Inc., consults for a number of financial firms including stock exchange operator Nasdaq OMX Group Inc., hedge fund D.E. Shaw, venture capital firm Andreessen Horowitz and asset management and advisory firm Alliance partners. Considering the Fed’s duty to regulate banks and mitigate financial risks, critics argue that it makes no sense to even consider Summers as a potential candidate for the Fed’s chair. Among the top contenders for the position, Mr.Summers has by far the most personal wealth and Wall Street experience, before his tenure in the Obama administration he had accumulated more than $ 7 million from private practice which included paid speeches, private consultation to being a faculty in the Harvard. But his huge wealth, Wall Street connections could be put him in an awkward position, especially since Chairman of the Federal Reserve would oversee the writings of several key legislations including the Dodd Frank Act. The “blue eyed” boy of the Wall Street even shot down a proposal by Senator Dodd and others to limit Wall Street bonuses.

Wall Street experience is not unusual for a Fed chairman, departing chairman Ben Bernanke has never been employed with the Wall Street, spending most of his career at the Princeton while his predecessor Alan Greenspan was the President of a consulting firm and worked in investment banking in the earlier part of his career.

But Robert McTeer, former President of the Bank of Dallas had a different opinion, “Larry Summers has been a public servant for a long time, in the Treasury, as the economic advisor to Obama and as the President of Harvard, and he’s obviously given up lot of income to do that over the years” he said.

Senator Ted Kaufman said “This Revolving door is a problem, and it will be a problem for Summers. The other side of the coin though is you need someone in this position who has the knowledge and experience. That’s always the trade-off”.

It would be interesting to see if Obama would prefer Summers with whom he has a close relationship or with Janet Yellen who is known to be a deliberate, thoughtful and inclusive leader, it’s up to the President to decide if he relents to the Wall Street’s pressure or side with the American people.

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