Last jobs report before election crucial in close race

Hiring increased last month, while the unemployment rate ticked higher, according to a report released just four days before the presidential election.

Story highlights

  • The monthly jobs report is the last one before next week's presidential election
  • It may be the single most motivating event at this point in the campaign
  • Americans are generally partisan and split when evaluating which candidate will create more jobs
  • But they believe propelling America forward fundamentally means jobs creation
The monthly jobs report -- the last before the nail-biting election next week -- may be the single most motivating event to take place at this point in the campaign.
On its own, it wouldn't be. But with a race so tight in so many swing states, swayable, uncommitted, undecided and even decided voters could be persuaded to cast a ballot for the presidential candidate they think can best propel the country forward.
And propelling America forward fundamentally means job creation.
Here are five things you need to know about the U.S. employment situation report for October released Friday.
1. It's a trend, not a bombshell
Both the confusing and less-relevant, though politically more popular, "unemployment rate," and the more important number of jobs created, have been trending in the right direction. There's nothing in today's number that fundamentally changes the fact that we're moving more slowly than was predicted and more slowly than we'd like to be moving.
It is to President Obama's advantage if you subscribe to trend and Mitt Romney's if you think it is too slow. But it is pointing the right way.
Obama argues that he's more than made up for the number of jobs lost since he inherited the crisis. Romney underscores that it's not the quantity, but the quality of those jobs, which have been lower-paying and have offered fewer benefits than those lost.
2. Neither candidate has a real plan
Polling continues to show that Americans are generally partisan and split when evaluating which candidate will create more jobs. That's because neither has a plan (though both have dreams and aspirations), and most people realize that the president has limited ability to motivate the large-scale creation of jobs in the private sector, which is where it needs to happen.
3. They're both making promises they have no way of guaranteeing they'll keep
Romney made a ridiculous pledge to create 12 million jobs in four years; a cynical ploy to play on Americans' most base economic fear. Obama matched the pledge, though, unlike Romney, doesn't bring it up nearly as often. Advisers to both campaigns have conceded to me under extensive questioning that this is more of an aspiration or a goal than an achievable promise. That's not how the candidates presented it. They have been dishonest.
4. Both plans are based on an average of 4% economic growth over the next term
We're at 2% now. 3% next year if we're lucky (see below). 4% is something virtually no economists say is likely. Romney pegs it all on tax cuts, and points to Ronald Reagan. But tax cuts under Reagan were, as a percentage, much greater than anything we can afford to do today.
Romney's math doesn't come close to adding up -- it's all about the GDP growth number. But if it's all about GDP growth, then the president doesn't matter. I could be president with 4% GDP growth and create 12 million jobs in four years, which is 3 million/year, or 250,000 a month. It's 50% higher than the best current projections. Obama, for his part, does have a better plan, based largely on the hidden "infrastructure bank" in his Jobs Act, which never got passed. But I talk about that more than he ever did. He's afraid of the best part of his plan for some reason.
5. Europe's the problem, not China
Europe's getting worse, not better. It's like a head cold; even once you start treating it, it still has to run its course and will get worse before it gets better. That hurts the U.S. -- and its need to achieve an average of 4% economic growth over the next four years. And we were all betting on a growing middle class in China, which would buy anything American-made that wasn't nailed down. But what Europe isn't buying, China isn't making. And while China's making less and less, its population is prospering more slowly. While the United States can have some limited impact on China's economic behavior, it has virtually no influence over the European mess, which is why you don't hear about it on the campaign trail. In the short term, Europe is America's real problem, not China.