Posted on 08/06/2004 7:36:54 PM PDT by RWR8189
The headlines are bad for Bush, the numbers no one pays attention to are fine.
THERE WAS A FLOOD of economic data last week--and of political commentary on the data--and John Kerry had it all his way. The economy created surprisingly few jobs--a mere 32,000, 10 percent of the number Bush had been hoping for--in July. To add to the president's discomfort, the already low job-creation figures for May and June were revised downwards by about 50,000. This wounds Bush in key swing states such as Wisconsin and Ohio. And not only there. All over America, even those working will now worry a bit more about their jobs, especially when new data show that experienced workers with long records of service are among those most frequently laid off, and for long periods.
Kerry's slogan, "We can do better," will resonate more loudly. Never mind that if voters put him in the White House, he promises to push through tax increases on the wealthy and on dividends and capital gains, a variety of protectionist measures, and an expensive health care plan. Just how such measures will stimulate economic growth remains a mystery.
The president will find it difficult to continue arguing that, thanks to his economic program, "we have turned the corner" from recession to growth. He has justified the massive deficits resulting from his tax cuts (and his spending spree) as needed to create jobs, which they have been doing--until now. He can, of course, point out that the unemployment rate dropped last month to 5.5 percent from 5.6 percent, that we have had 11 consecutive months of job growth, and that the indices of weekly hours and weekly payrolls increased. But these points will be drowned out by the roar of disappointment over the jobs figures. As will the good news contained in much of the data released last week.
The Institute for Supply Management reported that its index of manufacturing activity rose in July for the fourteenth consecutive month. Eighteen of the 20 industries surveyed reported stepped-up activity. Norbert J. Ore, the chairman of the institute's survey committee, summarized the good news, "The manufacturing sector continues to grow at a rapid rate." New orders are up, and inventories are too low relative to orders, meaning that manufacturers will have to step up output to restock their customers' shelves. Even export orders rose.
The service sector is also growing rapidly. In July, activity in that sector increased for the sixteenth consecutive month, and at a faster rate than in the previous month. New orders and order backlogs also rose in the service sector.
Consumer confidence is high, probably because personal incomes have grown for three consecutive quarters. Consumers returned to the auto showrooms in July, and drove vehicle sales up by more than 12 percent from June levels. Despite high gas prices, sales of light trucks and SUVs led the way.
Wal-Mart, which accounts for about 8 percent of all non-auto retail sales in the United States, reports that net sales for the four-week period ending July 30 increased by 10.9 percent over the same four weeks in 2003. Even Target, which has been struggling, reported an 8.8 percent increase in July sales over last year's levels. These figures bode well for the important back-to-school sales of clothes, computers, and bedding, although retailers remain nervous that high gasoline prices might sop up so much consumer purchasing power that parents will rein their darlings in when it comes to apparel and other optional goodies.
Meanwhile, retail sales at the high end of the market continue strong. The shops of leather goods seller Coach and other posh retailers such as Saks Fifth Avenue (up 15 percent) and Neiman Marcus (up 14 percent) remain crowded, and not merely with curious lookers.
Most important, the housing market continues to advance. Interest rates hover around a relatively low 6 percent, making new houses affordable to the bulk of Americans. And the banks are making credit freely--well, not freely, but cheaply--available to businesses as their profits and credit ratings rise.
But the most widely watched and reported figures--jobs, oil prices, and stock prices--are grist for the Kerry mill. The jobs market is not as strong as Bush would like it to be, oil and gas prices are higher than he would wish, and stock prices are stuck somewhere between level and falling.
Those are the numbers that voters see repeatedly reported on television screens, and, in the case of gas prices, feel in their pockets every time they fill their tanks. BusinessWeek estimates that consumers are spending an average of an extra $10 billion per month for gas and other energy products. Also, the effects of the Bush tax refunds have worn off, and a good day for stock prices is one on which they don't fall. All of this is apt to tame the animal spirits of both consumers and businessmen. That is not a recipe for reelecting an incumbent who took responsibility for the now-slowing recovery when it was steaming ahead.
The White House is hoping that Federal Reserve Board chairman Alan Greenspan will reassess his plans to continue raising interest rates. If he does, share prices might be given a bit of an uplift. The Bush team is also hoping that last week's announcement by the OPEC cartel that it will pump more oil to bring down prices proves to be more truthful than past OPEC statements. After all, the president is supposed to have close ties with the Saudi royal family. If that is true, now is the time for all good Saudis to come to the aid of their president, and tap the two million barrel per day reserve capacity that they have been claiming is available to them.
Finally, Bush's campaign advisers are counting on rising business investment to give the economy a quick and noticeable shot in the arm in the 86 days remaining before Americans go to the polls.
Voters, of course, do not live by bread alone. They worry not only about the economy, but about Iraq and whether they are secure in their homes, offices, and in the nation's shopping malls. Bush is hoping that things will break his way in Iraq, and that continued successes in uncovering al Qaeda plots will prevent a new terrorist attack in America. But that means the president is now at the mercy of events, rather than in charge of his campaign. Not exactly where he hoped to be at this late date in the election cycle.
Irwin M. Stelzer is a contributing editor to The Weekly Standard, director of economic policy studies at the Hudson Institute, and a columnist for the Sunday Times (London).
we are still judging job growth by the dark ages.....and GWB has to stand up and tell the country that t5hose jobs are a part of the count.
These numbers make me crazy. All I know is that my husband is back to work at a decent job after 2 years of struggling. Bush's tax cuts seem to have worked in my house and I dread what Kerry will do to my family if he gets the White House.
Consumer confidence is high, retail sales are high and the housing market continues to advance. Suddenly all of the people driving these numbers are going to start studying the numbers? I don't know, but it seems to me that the average person is worried most about their own wallet and next about the old fashioned unemployment rate.
This is the key thing. People do not figure out if they or their neighbors are employed by looking at seasonally adjusted establishment figures from the government. They look at their lives.
And worry about jobs is silly. It is not as if the press were not telling this lie to make Bush look bad that they would just give up and give Bush good press. If the jobs number had been great according to both measures rather than just one, then the press would be making up some other lie to try to promote al Querry.
We also must work. Work for his re-election and give of our time, money and effort to ensure the pro-infanticide, pro-Euroatheist, pro-appeasing to Terrorists candidate does not win.
Please, we all must.
Clintons numbers weren't this good when he was re-elected in 96. It's all about the media spin. Not the facts.
I agree 100%! Vote Republican!
OMG!!! Bush is in trouble!! The economy is in trouble!!! Only 1.5 million jobs have been created in the past few months and the economy is stronger today than it was when Bubba left the WH!!!
OMG!!!! The sky is falling, whatever shall we do??? Unemployment overall is down, this is TERRIBLE!!!! The stock market is strong, investors are investing again and consumers are optomistic!!!! Bread and vanilla ice a cream are WHITE!!! Bush must be cringing under his desk with all this TERRIBLE news. The sky is blue!!!
OMG!!!! Kerry is under attack by the veterans he served with who have accused him of being a LIAR!!!! Dear, oh dear, whatever shall we do????
Let's put the liberal hysteria aside and look at the reality. Kerry is in trouble. The Swiftboat vets are exposing him for the fraud that he is and he can't handle it. The Swiftboat Vets' ad is unfair and unethical, according to Kerry, but all of the negative attacks on Bush by MoveOn.org are perfectly ok. The economy may not have met expectations but, the fact is that more jobs were still created last month and unemployment still went down. This whole story is nothing more than the chicken littles trying to get the sheeple stirred up. It's working up to a point, the sheeple are running for cover. Let'em; just don't join'em.
"The economy created surprisingly few jobs--a mere 32,000, 10 percent of the number Bush had been hoping for..."
Bush was expecting 320,000 new jobs last month? Wow, that's a lot! Maybe in his next story, this reporter can tell us why a traffic cone was lodged two feet up his ass.
The Fed pays attention, which is why, at 2:15 next Tuesday, they will raise rates again by 25 basis points. Bet on it.
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And that's all there is to it. People will look at where they are financially and make a decision.
The problem could be bigger than Bush. Real interest rates are already negative. And more deficit spending is out of the question. In other words, both the fiscal and monetary cards have already been played. If the economy does not continue to grow on its own here, we are in big trouble.
But take heart. The economic signs are mixed at this point. There is a lot of positive news too. It is clearly too early to panic. All I am saying is that a dose of reality is in order.
Every time the press seems to run out of ammo to bash Bush, some government agency comes to their rescue! The unemployment rate fell but all we hear about is the jobs number. DAMN LIBERAL PRESS!!
"The economy needs to generate 150000 jobs each month just to absorb new workers coming into the labor force."
According to the labor department, it's more like 620,000 new jobs that need to be added. And the US economy added ~652,000 ish jobs, (I read the report this morning, and my numbers might be off +/- 10%) which makes the net about 32,000. I've seen your statement posted elsewhere on here today, and there's a thread with the report that backs mine up.
The household survey reflects job creation in small businesses (as opposed to the "payroll" survey, which measures employment in large corporations).
This critically important information is being ignored by the leftist media, who seize only upon the "bad" (or "shocking," according to CNN) numbers that came out in the payroll survey released today.
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