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The Republican National Convention is in 4 days in Cleveland.

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After an international tribunal invalidated Beijing's claims to the South China Sea, Chinese authorities have declared in no uncertain terms that they will be ignoring the ruling.

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Does Jobs Report Mean Things Are Getting Better?

Oct 5, 2012
Originally published on October 9, 2012 10:30 am



This is TELL ME MORE from NPR News. I'm Michel Martin. Coming up, the sweeping move to modernize the Catholic church known as Vatican II turns 50. We'll talk about that in Faith Matters in just a few minutes.

But, first, it's still all about the economy. The economy is still center stage this election season. This morning's jobs numbers are providing fresh material for the ongoing contest between the candidates and their philosophies and records.

In September, the country added 114,000 new jobs. The unemployment rate is now 7.8 percent. That is the first time it has been that low since President Obama took office in January 2009.

Now, one thing both presidential candidates agree on is that there is still work to do, but the agreement seems to end there. Mitt Romney's campaign released a statement saying this is, quote, "not what a real recovery looks like," unquote.

Meanwhile, the White House Council of Economic Advisors says the report proves the economy is heading in the right direction. Now, NPR is hosting a series called Solve This and we're taking a closer look at what the candidates are promising to do about economic issues, especially jobs. So, joining us now are NPR senior business editor Marilyn Geewax and also with us, economics reporter, Sudeep Reddy from the Wall Street Journal.

Welcome back to you both. Thank you both so much for coming.


SUDEEP REDDY: It's great to be here.

MARTIN: So, Marilyn, let's start with you. The latest jobs report seems to have surprised analysts. That's the impression I get. Tell us more about it. What did it reveal about hiring? What does it say about the economy?

GEEWAX: In one way, it didn't surprise people in that most economists had been predicting about 114,000 jobs would be created and that's what we saw. What was really a little shocking is that the unemployment rate - that is, you measure how many people are looking for work and how many actually have jobs. The rate dropped to 7.8 percent. It had been, all year long, trading in this - or moving in this very narrow range between 8.1 percent and 8.3 percent, so for it to drop a lot is kind of surprising.

But what that really reflects is that this is a very big economy. There's lots going on. The economists at the Bureau of Labor Statistics went back and looked at what happened this past summer and what they found was that, actually, job growth was stronger than they had thought, so they revised some numbers. And it seems like a jump because of these revisions, but really it's pretty much normal for the economists to go back and re-measure things.

You know, when you're in a country with 313 million people, there are lots of numbers to look at and, sometimes, there are these revisions.

MARTIN: Now, Sudeep, you're an alumna of the Wall Street Journal and a former White House correspondent and, you know, we've been looking at these jobs reports for quite a long time and I - forgive me. I may be wrong, but I don't remember the kind of immediate response that we are seeing from some quarters about these job numbers.

I mean, one of the things that's attracting a lot of attention is the former CEO of GE, Jack Welch, tweeted that the numbers were cooked, essentially, saying these Chicago guys will stop at nothing. I wanted to ask you, you know, about that.

First, tell me about the reaction. Do you agree that this seems rather extraordinary? And, secondly, is that possible? Is it possible to manipulate these numbers politically?

REDDY: What Jack Welch said is a lot of nonsense and he knows it. He was being ridiculous in trying to incite people and it worked. There were a lot of Republicans who came out and denounced him for saying something like that.

If an administration could cook the books on the job numbers, they'd produce a lot better numbers than this and you would have seen that late in the Bush Administration when the bottom fell out of the economy and you can see that now and you certainly wouldn't see an administration wait 'til this point.

So it's just kind of the same kind of nonsense that comes up a lot. We are, obviously, 33 days from an election and a lot of people get more heated at a time like this. What is important to understand, though, in these numbers is that there is a huge amount of statistical noise in this data. And we put a lot of weight on a specific number and what it means and what really matters are the trends, because there is no way to know when you have payrolls of $130 million across the country whether 100,000 is really that close to - when you're doing a survey - to what really happened.

So you have to look at the trends over time and the trends are showing that we're seeing some slow progress, but when you look at just the payroll numbers, the number of people employed by businesses, it really hasn't improved that much over the last two years. We're basically treading water in the labor market and we're not making the kind of progress you would need to see a sustained recovery.

MARTIN: Well, that's the news of the day, so let's focus a little bit more on the bigger picture. What are the economic plans of the presidential candidates? And, if you're just joining us, we are with NPR's Marilyn Geewax and the Wall Street Journal's Sudeep Reddy. We're talking about what the candidates say they're actually going to do about the economy and other important problems.

So let's talk about the basic elements of the candidates' plans and how are they different. Marilyn, do you want to start?

GEEWAX: Yes. The thing that's kind of interesting about the two sets of plans put forth by the Romney campaign and the Obama campaign is they're really - they're kind of similar. There's - in terms of the goals, everybody wants the same thing, a more balanced budget, more domestic energy production, a better education system, more trade with the world.

These are goals that, really, everyone agrees on, including the two campaigns. What's different is not the headlines, but the details. And, for example, to achieve - let's say - a balanced budget, the Romney plan focuses more on cutting taxes to spur growth to boost revenues in that way. The Obama plan relies more on taxing the wealthiest Americans more heavily to try to get things into balance.

Romney's plan would cut more in government spending. The Obama plan would call for more government spending to boost jobs through creating jobs for infrastructure, roads, bridges, hiring teachers.

So, really, you couldn't find anyone who would disagree with the goal of balancing the budget. The question is, how do you get there?

MARTIN: Well, Sudeep, it would seem that the devil is in the details, so pick up the thread there, if you would, and again, just add to what Marilyn just said about what the differences are. And did the debate Wednesday night illuminate those differences? I mean, that was one of the core subjects. You know, Mitt Romney spent a lot of time denying the Democrats' charges that his plan either doesn't make sense economically, that the math does not work and that it would largely benefit the rich and disadvantage the middle class.

REDDY: I actually think we've learned a lot about the differences between the two candidates in one key area and that's the role for government. They both are arguing for a different role for government in achieving, in many cases, the same ends. They both want stronger employment growth. They both want a stronger education system. They want a lot of things that presidents have always wanted.

But what they're saying is they're coming from it from different ends. President Obama is trying to make the case that the government can help achieve these goals. The government has a role when you look at the creation of the Internet, when you look at the national highway system, when you look at a lot of the achievements we've made as a country. The government had a role in those and it's important for the government to step up and play that role.

Governor Romney is making the case that the government should actually step aside, that it's the private sector that is actually doing the heavy lifting and that is why we should pull the government away from this. There's actually a lot of nuance in both of those positions. Governor Romney said on Wednesday night that regulation is essential, which is probably not what you would expect him to say for somebody who's going around beating up on regulation. And President Obama said, very clearly and very openly, the genius of America is the free enterprise system and he understands that businesses are at the core of the country and what he just wants to do is provide some nudges along the way.

And, if you look at energy, for instance, that's one area where the Obama Administration wants to push renewable energy and wants the government to play some role and the Romney camp is saying, pull back and let energy just develop by market forces.

GEEWAX: You know, Michel...

MARTIN: Marilyn?

GEEWAX: One of the things that's so strange about this whole election cycle is, if you look at their plans, as I say, the goals are very similar. As Sudeep has just noted, they even concede points to each other. Yes. We need some regulation. Yes. We need free enterprise.

So, if we all agree, I mean, there's sort of this broad-based understanding of what the economy needs and yet you look at Congress and it's complete gridlock. It's like as if we were talking about, you know, people from Mars and others from, you know, Saturn or something. I mean...

MARTIN: But that speaks to...

GEEWAX: It's just amazing.

MARTIN: That speaks to a very different belief in the proper approach to get to that point. And one of the questions I had was, was there any clarity on the facts? I mean, there was a big dispute about whether either party - either candidate's actual plan - whether the basic math actually works. Can you achieve the goal that they set out, using the methods that each of them describes? And would you - Sudeep, was there any clarity on that point?

REDDY: I actually don't think there was that much clarity on those points. We got a lot of understanding of their philosophical approach, but for instance, Governor Romney has made a big deal about how he would cap deductions, tax deductions, and he's used three different numbers in where he would put the cutoff, $17,000, $25,000, $50,000 in total amount of deductions.

And what he's showing is that he's thinking more about the approach rather than the specific numbers and, on one level, we shouldn't expect a presidential campaign to have to come up with numbers across the board on every one of their policies. But if you're going to make a pitch based on something like that, then you need to actually make the math work out if you want your pitch to be believable, and we haven't quite seen that.

MARTIN: But, before we let you go, Sudeep, I have to ask. There are some third party candidates who haven't gotten a lot of traction in the polls and have not been invited to participate in any of these foray, so do they have any plans that are getting any attention? Remember, a third party candidate, you know, some years ago did actually have an impact on the race. That was the business tycoon, Ross Perot. We've got the former governor of New Mexico, Gary Johnson. We've got the Green Party candidate, Dr. Jill Stein. Did either of them offer a detailed plan?

REDDY: All of these - many of these big third parties have offered detailed plans. There are actually 140 candidates running for president, nationwide, something you wouldn't know watching just the two on the debate.

But the two get the most attention because they're probably closest to the center, and if you were to look at the Green Party and the Libertarian Party, they actually - when you look at their platforms, they're very interesting. There's a lot of thought that goes into them. The Libertarian Party platform is, of course, rather short because it calls for limited government, no foreign intervention in other countries, no foreign aid.

And the Green Party platform is really extensive in terms of what they want for the government role in the economy. For instance, they want to reduce the work week to 30 to 35 hours because it would actually create more jobs when you need more workers and so that's one example.

MARTIN: Big smiles all around here.

GEEWAX: Especially on a Friday.

MARTIN: That's right. Especially on a Friday.

GEEWAX: That's a great idea.

MARTIN: Sudeep Reddy is an economics reporter for the Wall Street Journal. Marilyn Geewax is a senior business editor or NPR and they were both kind enough to join us once again in our Washington, D.C. studios.

Thank you both so much.

GEEWAX: You're welcome.

REDDY: Thanks, Michel.


MARTIN: Coming up, Nicholas Vreeland used to be a New York-based world traveling photographer until he shifted gears and changed his life.

NICHOLAS VREELAND: To devote my life to a spiritual path was the most valuable thing I could do.

MARTIN: Now, he is the first westerner to lead one of the most important monasteries in Tibetan Buddhism. We'll find out more about him. That's just ahead on TELL ME MORE from NPR News. I'm Michel Martin.

(SOUNDBITE OF MUSIC) Transcript provided by NPR, Copyright National Public Radio.