Our View: Jobs data good, but not real good
Friday's announcement of the new national unemployment number was widely hailed as good news for President Barack Obama's re-election bid. The jobless rate for September dipped to 7.8 percent from 8.1 percent in August. The new number is the lowest since the president took office in January 2009.
According to the US Department of Labor Statistics, 114,000 jobs were created in September. The department also revised its numbers upward by 86,000 for the previous two months combined. According to the BLS, "In 2012, employment growth has averaged 146,000 per month, compared with an average monthly gain of 153,000 in 2011."
Some Republicans have charged that the numbers were tampered with to help the president. Actually, the numbers are accurate, Esmael Adibi told us; he's the director of the Center for Economic Research at Chapman University. "The report is good. Still, it's not at a pace we'd like to see. We need 125,000 jobs created every month just to take care of new people entering the work force," such as new graduates.
So with 146,000 jobs created per month on average so far in 2012, but 125,000 of them going to new workers, that leaves just 21,000 a month going to unemployed people. And Adibi cautioned that the future is uncertain. "Yes, the jobs market is showing signs of life," he said. "But there are headwinds ahead of us." He mentioned the "fiscal cliff" on Jan. 1, when, unless Congress intervenes, federal tax increases dig in — including Obamacare tax increases and fees — and the Bush-era tax cuts and the payroll tax cut expire.
The sequestration of funds — automatic spending cuts — from the Budget Control Act of 2012 also could cut federal spending by $90 billion on Jan. 1. Although we support budget cuts, doing so abruptly could cause economic dislocations.
However, Adibi said he believes that, regardless of who wins the presidency, the victor's first order of business will be to deal with the fiscal cliff. Even Obama, Adibi expects, would push to rescind the tax increases to prevent fiscal calamity.
Unemployment numbers for California won't be released until Oct. 19. But the trend so far this year also has been for more jobs creation in the Golden State. However, Adibi warned, state tax increases on the November ballot could endanger that improvement. Proposition 30 would extract up to another $8.5 billion from the jobs-creating private economy; alternatively, Prop. 38 would siphon out $10 billion. At least for these jobs-killing initiatives, on Election Day taxpayers can take direct action.