July Jobs Report: A Political Analysis

The Labor Department announces the number of jobs added in July and the national unemployment rate Friday. NPR's Scott Horsley joins Renee Montagne to talk about the report and the consequences for the presidential race.

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It's MORNING EDITION from NPR News. I'm Steve Inskeep.

RENEE MONTAGNE, HOST:

And I'm Renée Montagne. The Labor Department is out this morning with its closely watched employment report. And it's a mixed picture for the U.S. job market. Employers added 163,000 workers last month. That's better than forecasters were expecting, but it is still short of what the economy needs. The government also says the unemployment rate inched up to 8.3 percent. Joining us now to talk about the jobs numbers and what they mean for the presidential race is NPR's Scott Horsley. Good morning.

SCOTT HORSLEY, BYLINE: Good morning.

MONTAGNE: What does this say about the jobs picture?

HORSLEY: Well, as you say, it's a mixed picture. In terms of hiring, it's definitely an improvement. It's well above what most forecasters were expecting. It's more than double the pace of hiring we saw in June. The initial reaction from the stock market, this morning's been very positive. We're still not seeing the robust pace of hiring that we were earlier this year, but it's a lot stronger than we were getting in the last few months. Now, here's the caveat: the Labor Department uses a separate survey to calculate the unemployment rate. That survey actually found fewer people looking for work in July. And what's more, fewer - it's found hundreds of thousands who had quit the job market. That's not what you want to see. On balance, though, the jobs number, the employment number, is the one that usually gets the most attention. And that, at least, is moving in the right direction.

MONTAGNE: And the monthly jobs numbers, obviously, is regular fodder for the presidential contenders. What does this help - or who does this help and who does it hurt?

HORSLEY: I think you have to say that this is a positive report for President Obama. The expectations were pretty low, but this report clears the bar by a wide margin. While the recovery's still sluggish, this does let the president and his team say they're adding jobs, the pace of hiring's picking up. We've got a long way to go but we're moving in the right direction. Obviously, on the other hand, Republican Mitt Romney can point to the rise in the unemployment rate. Now, the White House points out that jump from 8.2 to 8.3 percent is, kind of, a rounding - or it actually went from 8.217 to 8.254 in July. But you can be sure that newspapers and the Romney campaign will round that up to 8.3.

And that's the thing about a slow recovery. The president can underline recovery. Mitt Romney can emphasize slow.

MONTAGNE: Scott, of course, there's always a lot of finger-pointing, politically, when the pace of hiring, say, is still short of what the economy actually needs. I mean, nobody, I'm sure, in the White House wants to see that 8.3 percent. Tell us a little bit more about the two parties are responding.

HORSLEY: Well, Republicans say that that persistently high unemployment rate is an indictment of the president's policies. That's been their message for months now - maybe for years. And certainly, a lot of voters will see it that way. One could, however, make the argument that fiscal policy, over the last year and a half, really has not been driven by President Obama.

The stimulus money's mostly gone. What we're seeing instead, now, has been cuts in government spending, for some time, at the state and local level, and now at the federal level as well. Those cuts, which are driven by Republicans, have been a drag on the economy. We saw another 9,000 government jobs lost last month. That's in contrast to previous recoveries where government spending could serve as a crutch.

Now, the GOP will argue that the president's health care law, financial reform, other policies have discouraged hiring, and they can point to some small business surveys that support that. So, this is a case where both sides have a story that they can tell that it's the other party's policies that are to blame for the economy's ills.

MONTAGNE: And Scott, is there anything on the policy horizon that would lead to an up tick in job growth.

HORSLEY: Probably not. The Federal Reserve said, this week, that they're going to be watching the situation closely, but they're not likely to take action before their September meeting. And, if anything, this better than expected jobs report might mean less likelihood of Fed action. Certainly, were not likely to see any additional government spending before the November election, despite the president's lobbying for that.

And we have continued uncertainty about Europe, even though we've seen some promises of action there, it hasn't been backed up by concrete measures.

MONTAGNE: Scott, thanks very much.

HORSLEY: Good to be with you.

MONTAGNE: NPR's Scott Horsley, speaking to us from the White House.

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