The government reported that 163,000 payroll jobs were created in July. But the unemployment rate — which is calculated through a separate survey — ticked up to 8.3 percent from 8.2 percent.
The payrolls number taken alone is a decent one; it beat the market’s expectations of about 100,000 jobs being created.
But it is important to take the number in context. Forecasts of the payrolls numbers are quite inaccurate; they miss, on average, by 68,000 jobs in one direction or another. In this case, the miss was to the upside — and better for job-seekers than the other way around.
Still, it is hard to calculate the number of jobs in the economy at any given time, let alone to forecast it accurately. That is why, as Jonathan Bernstein advised on Thursday, and as I suggested on TimesCast, we ought to have a fairly high threshold for what qualifies as a newsworthy jobs report.
Mr. Bernstein argued that any payrolls number between 50,000 and 150,000 jobs was not likely to have much effect politically. The actual gain of 163,000 jobs sits right on the brink of that.
So it is worth looking toward tiebreakers. For instance, were there substantial revisions to the previous numbers? In this case, they were a wash; the May jobs number was revised up, but the June figure was revised down.
And you can certainly look at the unemployment rate. The survey from which those numbers are calculated is subject to more statistical noise than the payrolls numbers, but that does not mean that it is meaningless. In this case, the unemployment numbers were poor.
So I think this report ought to mostly reinforce pre-existing impressions about the economy: that the recovery is slow, but that the nation is probably not on the verge of a double-dip recession.
Politically, the status quo appears to favor President Obama. If the election were held today, he would have a 77 percent chance of winning the Electoral College, according to our forecast model’s “now-cast,” although the victory would almost certainly be by a slim margin — possibly even a victory in the Electoral College that is not reflected in the national popular vote.
By November, Mr. Obama is less certain to win, since there is more uncertainty about the economy, and other factors come into play. Our model figures that there is about a 70 percent chance that he does so.
The July jobs numbers might reduce that uncertainty slightly. Whatever impressions Americans had about the economy are likely to be reinforced by the report; Democrats will cite the relatively favorable payrolls numbers, and Republicans will trumpet the increase in the unemployment rate. There are just three more jobs reports between now and the election.
The number is favorable for Mr. Obama in the sense that no news qualifies as good news for him if he is ahead right now. But the report is not a game-changer, economically or politically.
