When a fair-minded economist like Irwin Stelzer finds reason to be cautious about the quarterly economic report put out by the Obama administration, strap in and hold on.
First of all, the 4% growth reported in the Apr-thru-Jun* 2nd quarter numbers is subject to revision anyway; add to that ‘inventory replacement’ made up almost half the growth.
That happens every year: after the 1st quarter holiday buying spree, shelves are bare, so removing that ‘seasonal adjustment’, growth was a paltry 2.3% (IF the 4% is real).
And the investment houses are warning clients at least 1% of the ‘growth’ reported is in line with catching up from bad weather that depressed the economy in the 1st quarter.
Add that to ‘seasonal adjustment’; now 2nd quarter growth is 1.3%, again if 4% is real.
Then there’s the jobs number, reported as 209,000. While the media hypes it up as more good news for Obama policy (remember…it’s less than 100 days to elections):
- new jobs are 10% lower than the 230,000 expected,
- those jobs may be more part-time jobs, not full-time jobs,
- they may have been temporary jobs to help build post-holiday inventories (which explains ‘unexpected’ rise in new jobless claims, because temps were laid off?),
- that ‘new jobless claim’ rise was 302,000 newly unemployed workers…
Incredibly, Obama has recently started touting the economy as a major achievement! It might seem ridiculous to many, based on the ‘misery index’ evidence…
…but not so ridiculous when you consider he can control gov’t economic reporting!
Discussing this Friday, even Rush Limbaugh missed a chance to expose Obama’s ploy.
He pointed out that govt numbers can’t be trusted, and the economy’s still suffering, but the reason Obama plans to pivot to the economy is because he can build uncertainty.
Obama knows, if he can create uncertainty by making enough voters feel the economic conditions MIGHT be improving (so then, why change?), he could keep the Senate.
For fence-sitting voters to vote GOP, Republican candidates must convince them the GOP has a better plan…to keep fence-sitters, Obama only has to make them uncertain.
Between now and November, Obama will hammer at how Republicans are only out for themselves…and the only thing that might help voters is to stick with Democrats.
Two things you can count on when reading Gov’t economic and jobs reports, between now and the November mid-terms: expect the numbers to be rosy…and bogus.
Republican candidates would be well-advised to plan accordingly…
…and message effectively.
(*Updated to correct 2nd quarter months as Apr-thru-Jun)