Can Joe Scarborough Read a Jobs Report?
When August's jobs numbers were announced Friday morning, Joe Scarborough immediately pronounced them "good news for the President." Announcing the drop in unemployment from 8.3 percent to 8.1 percent, Joe added, "Ladies and gentlemen, what you call that is a tailwind." This led to cheers from the "Morning Joe" audience:
Apparently, Scarborough and his audience have no idea how to read a jobs report. It's true we added roughly 96k jobs in August (though revisions are the norm), but we also added people to the workforce in August. In order to keep up with population growth, the economy needs to add roughly 125k jobs every month (some say 125-150k). Any jobs number under 125k signals that the economy is not keeping pace with population growth.
And contrary to what Scarborough suggested, there are two possible explanations for a drop in the unemployment rate. The first possible reason is that lots of people got new jobs. But in August, that clearly was not the case. The other possible reason is that the number of people looking for work dropped. This is called the participation rate. When workers drop out of the job market, they are no longer counted as participants, so the rate of unemployment drops. This is what happened in August, with the participation rate dropping to 63.5 percent. That's the lowest rate since September of 1981. Needless to say, that is not good news and definitely not a "tailwind" for Obama.
Finally, Joe didn't mention that each month the jobs numbers for previous months are readjusted. This month, the BLS adjusted the number of jobs added in the two previous months downward. June dropped by 19,000 from 64K to 45K. July dropped 22,000 from 163K to 141K. Obviously, those revisions are bad news for the economy, not good news.
There is probably no one outside the Obama administration who sees this month's report as anything but disappointing. Even Paul Krugman didn't try to claim it was positive; he only said it showed no change. As the "Lean Forward" network, MSNBC has a vested interest in spinning things in a positive direction for the President, but the network went beyond spin in proclaiming these numbers good news. This report is clearly a headwind for Obama's reelection chances, not a tailwind.