This month there will be two employment reports.
The second one — coming on Sept. 27 — will get very little attention but could be more important to the Republicans than last Friday’s disastrous jobs report.
You couldn’t avoid hearing that the Labor Department said on Friday that only 96,000 new US jobs were created in August. That was far lower than even the most conservative Wall Street estimates of 125,000 — and too low to be any use in helping the US economy.
The unemployment rate did drop to 8.1 percent from 8.3 percent but only because 368,000 people said “screw it” and stopped looking for work. And if you aren’t looking, you aren’t counted as unemployed in the government’s survey.
And the mildly impressive job growth of 163,000 in July wasn’t all it was cracked up to be — as I suspected in a column last month. Labor took 22,000 of those jobs out of the revised July count.
The Federal Reserve is meeting this week to determine whether it should do another useless Quantitative Easing. Even with Friday’s horrible report, the chances are about 50/50 that the Fed does a QE.
The employment situation is not good news for President Obama. And anything the Fed does will look like a move to keep the president in office, and help Fed chairman Ben Bernanke retain his job.
And Republican presidential candidate Willard Mitt Romney (yes, I was surprised by that first name, too) will get as much mileage as he can from the president’s inability to expand the economy.
The Democrats will continue to say this: when President Obama came into office, the country was losing an average of 750,000 jobs a month and now it is not. The president could also use some creative statistics to prove he hasn’t been all that bad.
In July 2011, the president will say, the country had only 131.04 million jobs. Now, the number is 133.09 million — growth of more than 2 million.
The president could use those months for comparisons and while it wouldn’t be the most honest thing to do (because using other months prove different things), he might avoid being smacked down by Romney.
But then there’s the Sept. 27 report.
It’s called the “Preliminary Benchmark Revision,” and despite that catchy name and the fact that it was highlighted with a box around it in last Friday’s report, reporters and analysts know little about it.
And they care even less, even though Labor explained in its release Friday that these revised numbers come from honest-to-goodness unemployment records kept by each state.
By contrast, Labor’s initial numbers come from guesses, coin tosses and Ouija board-like estimates.
From here on I’ll christen the Preliminary Benchmark Revision the “Oops Report” — and in it Labor will ’fess up that all the jobs it thought had been created really hadn’t been. Many of those 2 million jobs Obama can now brag about could evaporate in an Oops moment.
Keep in mind that even if that 2 million jobs gain holds up, the country is still down some 6 million jobs since the peak employment levels of 2007. All the president has to do, of course, is ignore that fact.
There are really two Oops Reports. The one coming out on Sept. 27 is only preliminary numbers. The final Oops — the complete benchmark revision — comes out early next year.
How many of the 133.09 million jobs could the Sept. 27 Oops Report erase? Labor isn’t saying, but the final revision in 2010 erased 378,000 jobs. In 2009, the Oops Report subtracted 902,000 jobs.
In a display of complete honesty, I should say that the 2011 Oops Report actually added jobs to the count, although it still puzzles me how that happened in an economy as dead as this.
So the Sept 27 Oops Report could add jobs to the total, but don’t count on it. Instead, Oops is likely to say that from March 2010 to March 2011 Labor actually overestimated the number of jobs in the US.
It’s more likely that the revision goes Romney’s way instead of Obama’s. And if this year’s figure turns out to be anything like 2009’s, half of the job growth being claimed by the Obama Administration could disappear.
That, of course, would be a disaster for Obama and a gift to Romney. The problem is the Romney camp probably doesn’t even know this revision is on the way.
As I’ve been saying for the looongest time, Labor adds a large number of jobs each month because it thinks — but can’t prove — that people are starting businesses and hiring workers.
This is called the Birth/Death Model, and Labor has used this model to add 500,000 jobs that might not exist to its count from March 2011 to March 2012. The department has picked up the pace on these phantom jobs since March, but those figures won’t be included in the Sept. 27 revision.
If the Oops Report concludes that new businesses really didn’t create half a million new jobs in this dour economy, then the numbers could fall solidly in Romney’s favor.
What are the chances that Labor uncounted these phantom jobs and that the revision will help the president? Those chances aren’t very good.