Back in early May average monthly job growth was expected to be 182,000 according to Moody's Analytics. In early June the number had fallen to 157,000, last week it dropped to 149,000 and now it's 131,000. The NYT believes that the figure is significant in the context of the election - anything over 175,000 would favor President Obama, anything under 100,000 would favor Gov. Romney, and anything between 100,000 and 175,000 would suggest a close contest. So we have a nail biter on our hands, which has been the conventional wisdom for some time. From Moody's:
With the U.S. economy growing at barely a 2% annual pace and adding fewer than 100,000 jobs per month, it is easy to be worried, but panic would be premature. The second half of 2012 has the potential to be stronger than the first. But policy will be key: Washington must ease back on fiscal tightening while planning to make deficits and debt sustainable over the long term. The 80,000 net job gain in June was disappointing. Yet the weakness was limited to a few industries, including education/healthcare, retail trade (primarily department stores) and information. The education/healthcare data are slightly suspicious; the industry has added an average of 31,000 jobs per month since the recovery began. Though there appear to be some outliers in June, we have revised down our outlook for hiring over the next few months. Other details suggest better times are ahead.
NYT columnist Floyd Norris offers a little unconventional wisdom:
The disappointing jobs report for June will increase pressure on the Federal Reserve to do more. It will add to hopes (among Republicans) or fears (among Democrats) that a slowing economy could damage President Obama's re-election prospects. May I suggest an alternative explanation? The recovery has been chugging along slowly for a couple of years, and while it may have slowed a little in the last few months, that change has been minor.