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Wednesday, Sep 5, 2012 1:27 PM UTC

The unemployment rate election

On Friday, the Bureau of Labor Statistics releases its latest report. Which candidate's message will it support?

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Topics: RobertReich.org, Barack Obama, Mitt Romney, 2012 Elections, Unemployment,

The unemployment rate election (Credit: Reuters/Kevin Lamarque)
This originally appeared on Robert Reich's blog.

The biggest political news this week won’t be the Democratic convention. It will be Friday’s unemployment report.

If the trend is good — if the rate of unemployment drops, and the number of payroll jobs is as good if not better than it was in July — President Obama’s claim that we’re on the right track gains crucial credibility. But if these numbers are moving in the wrong direction, Romney’s claim the nation needs a new start may appear more credible.

I don’t recall a time when these jobs numbers, compiled monthly by the Bureau of Labor Statistics (a highly professional group whose findings are completely insulated from politics), were as politically significant as they’ll be this Friday, and the first Fridays in October and November.

Yet these numbers are really crude approximations. They’re adjusted for seasonal variations — based on historical data that may have less significance today, when the economy is still struggling to emerge from the worst downturn since the Great Depression. The numbers are also subject to corrections and revisions later, as more data comes in.

But perhaps the biggest flaw — and irony — is that when and if jobs really do start to return, many of the people who had been too discouraged to look for work start looking again. And when more people are looking, the rate of unemployment rises — because that rate is based on the percent of Americans actively looking for work. Those who have stopped looking aren’t counted.

Robert Reich, one of the nation’s leading experts on work and the economy, is Chancellor’s Professor of Public Policy at the Goldman School of Public Policy at the University of California at Berkeley. He has served in three national administrations, most recently as secretary of labor under President Bill Clinton. Time Magazine has named him one of the ten most effective cabinet secretaries of the last century. He has written 13 books, including his latest best-seller, “Aftershock: The Next Economy and America’s Future;” “The Work of Nations,” which has been translated into 22 languages; and his newest, an e-book, “Beyond Outrage.” His syndicated columns, television appearances, and public radio commentaries reach millions of people each week. He is also a founding editor of the American Prospect magazine, and Chairman of the citizen’s group Common Cause. His widely-read blog can be found at www.robertreich.org. More Robert Reich.

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