A less-than-stellar employment report became a political flashpoint Friday as the U.S. got a taste of what the next several months of economic releases could look like. In a contentious election year, numbers themselves have become politicized.
The domestic labor market tacked on just 160,000 new jobs in April, according to the Bureau of Labor Statistics, which represents the worst monthly employment tally since September’s 149,000. Revisions to prior months’ data also knocked off 19,000 previously reported jobs.
Friday’s report, which happens to be the first one released since the GOP found its presumptive nominee in businessman Donald Trump, made waves in Washington as Republicans used the opportunity to take aim at economic growth under President Barack Obama – growth that has been repeatedly defended by Democratic front-runner Hillary Clinton.
Obama defended his policies and the country’s economic expansion under his watch during remarks Friday afternoon from the White House – an uncharacteristically timed appearance given the humdrum contents of the employment report.
“Seven years ago, in April of 2009, our economy lost nearly 700,000 jobs and our unemployment rate hit 9 percent on its way to 10 percent. Seven years later, in April 2016, our economy added 160,000 new jobs,” Obama said.
His remarks followed criticism from Republican National Committee Chairman Reince Priebus in a statement Friday morning.
“This disappointing jobs report shows this is a hollow recovery that has left too many Americans behind. Eight years of liberal Democrat policies have failed to produce prosperity for middle class families,” Priebus said. “President [Barack] Obama has delivered the weakest period of growth since the 1930s, but Hillary Clinton thinks he doesn’t get enough credit and wants to double down on his failed agenda.”
Although the report largely underwhelmed – and potentially cast doubt on the Federal Reserve’s ability to raise interest rates later this year – a headline number like 160,000 doesn’t usually generate much political commentary from either side of the spectrum.
Indeed, in the last 67 consecutive months of employment expansion, April was only the 21st worst for job growth. So it was neither remarkably good nor horrendously bad from an economic perspective.
The problem: There are enough positive and negative data points floating around nowadays that neither Obama nor Priebus are technically wrong.
The U.S. economy has grown an average of only 1.4 percent each year under the Obama administration. For comparison’s sake, U.S. gross domestic product expanded an average of more than 2.1 percent each year under George W. Bush and nearly 3.9 percent each year under Bill Clinton.
But 67 months of job growth is far and away the longest consecutive streak of employment growth in modern history (though there’s some debate as to whether the quality of the labor market’s improvement matches up with its duration).
These are hardly the only two examples of seemingly counter-intuitive metrics, and discussions about the economy heading into the 2016 election are likely to be more politically charged than objective as November gets closer.
Friday’s not great, but not terrible, employment report offered up significantly more political finger-pointing than any single data release has generated in months. Perhaps it’s because the GOP has come to terms with Trump and is now turning its focus on Clinton. Perhaps it’s because the labor market has had so many strong months lately that shots were worth firing while the data was soft. But Priebus was quick to attack Obama’s less-than-stellar growth metrics shortly after Friday’s employment report dropped.
Obama later chalked up recent economic losses under his administration to “lagging growth in Europe, Japan and now China” and “a Republican Congress” that has yet to “take some steps that are pretty common sense.”
For what it’s worth, most analysts who actually study the economy for a living weren’t terribly alarmed by Friday’s soft jobs numbers. Rick Rieder, a managing director and chief investment officer of global fixed income at BlackRock, said Friday that the soft report was “not a surprise to us, as for several months now we have argued that employment would likely begin to trend down by mid-2016, partly based on the fact that the job market had become so tight that large scale employment gains would be more difficult to sustain.”
Sophia Koropeckyj, a managing director at Moody’s Analytics, noted that the report was “disappointing” but said it “raises no concern about the durability of the expansion and does not change the narrative for the labor market.”
Nariman Behravesh, chief economist at research and analysis company IHS, called April a “bad news/good news month” and said that the weakness is “temporary” and that “in the coming months, job growth will rebound to 200,00 a month or possibly more.”
“We don’t ascribe too much long-term significance to a single monthly jobs report number – what’s really important is that the U.S. is likely to add 2 million new jobs in 2016,” David Daglio, a senior managing director and head of the Opportunistic Value strategies team at BNY Mellon, wrote in a research note earlier this week.
Politicians have made much ado about just one disappointing employment report that could still be revised up in the coming months. But analysts generally aren’t concerned about the expansion at this point. However, during a contentious election year in which the likely Democratic candidate has largely backed the outgoing president’s economic initiatives, political polarization over incoming data points is likely to continue in the months ahead.
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