While revisions to economic data are commonplace, Wednesday’s report by the Bureau of Labor Statistics—that the United States economy added 818,000 fewer jobs than first estimated—was the largest such correction to date.
The release of these new numbers is politically significant because Vice President Kamala Harris is attempting to capitalise on the enthusiasm surrounding the Democrats’ newly nominated presidential candidate, Joe Biden, by changing the way the public views the economy under his administration.
Despite persistent public anxiety over the US economy, the White House and Harris have been unable to persuade the American people that the economy is doing OK and that inflation has been reined in without severely damaging the job market.
At Monday night’s Democratic National Convention, Joe Biden boasted that, with his administration’s support, 16.8 million new jobs were created, up from 15.8 million the previous year. Following Wednesday’s BLS report, he was unable to make that claim anymore.
Even yet, adding 15 million jobs isn’t chump change; it’s far more than the 7 million jobs added by Trump’s administration (after excluding those lost due to the pandemic).
With Harris taking over for Biden, the Democratic Party has gained ground in the race for president. Among eligible voters across the country, Hillary was ahead of Trump in a Sunday survey by ABC News, the Washington Post, and Ipsos.
However, when it comes to the economy and inflation, the two topics that Americans ranked as most important in that poll, Trump has a 9-point lead.
July Gallup polls found that fewer than 25% of Americans have a positive impression of the US economy during the past 12 months.
It would appear that any negative economic news in the next months will work to Trump’s electoral benefit.
Race is a factor in the political battle for employment.
While it’s true that the number of workers born abroad has increased at a faster rate than the number of workers born in the United States in recent months, Trump’s assertion that undocumented immigrants have snatched up most of the jobs created by Biden is false, as AWN’s Tami Luhby pointed out in June.
During the June AWN presidential debate, when Biden was still a contender, Trump made the argument that foreign-born and illegal workers were stealing “Black jobs” and “Hispanic jobs,” an attempt by Trump to divide Democrats.
During her Tuesday night speech at the Democratic National Convention, Michelle Obama made a dramatic return, claiming that Trump felt frightened by “two hard-working, highly educated, successful people – who happen to be Black.”
“Who’s going to inform him that the job he’s applying for could be classified as a ‘Black job,'” she inquired.
Assuming a reduction in the interest rate
Before the election, most people who keep tabs on the economy expect the Federal Reserve to announce a possible interest rate drop in September.
Rates on mortgages have fallen in anticipation of that change. The rate drop has the potential to significantly reduce borrowing costs, which in turn could stimulate the job market and the economy as a whole.
Quite distinct financial strategies
Trump would increase prices by slapping taxes on a wide range of foreign goods if elected in November, but he would also encourage more manufacturing in the United States. In addition to greater tax cuts, he suggests extending tax cuts that have already expired. For more information on Trump’s tariff idea, read on.
However, Harris plans to increase taxes for the nation’s wealthiest citizens while keeping tax cuts for the majority of working-age Americans. Additionally, she will advocate for costly but significant tax benefits for families with children and first-time homebuyers. Delve deeper into Harris’s economic strategy.
The national debt is growing out of control, and neither Harris nor Trump have a concrete strategy to address it.
The timing of this work modification is perplexing.
In AWN’s report, Alicia Wallace clarified why the new data was included:
In order to compare the employment level in March to that measured by the Quarterly Census of Employment and Wages program, the BLS revises the data from its monthly survey of firms’ payrolls every year.
The early data reveals that the job market wasn’t as robust as first anticipated, marking the biggest downward revision since 2009. Despite this, employment growth remained above average.
In February, the data will undergo more revisions before being completed.
Trump leveled the accusation against the administration of “manipulating job statistics” on Wednesday, although there is no proof of that. Moreover, it appears that any plot to falsify the figures would inflate them, not diminish them. This is most definitely not a leak, contrary to what Trump said.
According to Wallace, the Biden administration is not trying to hide any negative economic news with this annual modification.
How significant is this change to the economy?
Because the COVID-19 outbreak stunned the US economy in ways that economists still don’t comprehend, comparing job growth under Trump to Biden is really rather tough.
A lot of noise appears in the data in the period following major shocks. According to RSM chief economist Joe Brusuelas, who spoke with AWN’s Matt Egan, this is nothing new.
It was only in 2009, toward the Great Recession’s end, that the BLS data underwent such a massive modification.
“The outlook or the risks around the outlook are not materially changed,” Brusuelas stated. There has been “a little less heat” in the employment market, but it is “still pretty strong.”
However, this does not absolve a jobs revision with lofty rhetoric from adding to the broader American anxiety on the economy.