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When A Good Jobs Report Is Bad For Political Spin

Mar 8, 2013
Originally published on March 8, 2013 3:26 pm

The February jobs report was just the latest proof that the economy doesn't really care how much it confounds the messaging strategies of Washington's political class.

News that the economy created 236,000 jobs last month and that the unemployment rate fell to 7.7 percent, its lowest level in more than four years, caught nearly everyone by surprise after economists forecast perhaps 171,000 new jobs.

For President Obama, the seemingly nice surprise has a real downside: It could make his task of convincing Republicans that the economy is being harmed by their emphasis on deficit reduction, and specifically by the mandated sequester spending cuts, that much tougher.

That concern could be seen in a post on the White House blog by the chairman of the president's Council of Economic Advisers, Alan Krueger, who was speaking of Labor Department figures citing surveys of households and employers:

"It is important to bear in mind that the reference period for today's surveys was the week of February 10-16 for the household survey and the pay period containing February 12th for the establishment survey, both of which were before sequestration began. The Administration continues to urge Congress to move toward a sustainable Federal budget in a responsible way that balances tax loophole closing, entitlement reform, and sensible spending cuts. ... "

In other words, it's too soon to see the effects of the $85 billion in sequester-related cuts to federal spending this fiscal year, with any accompanying furloughs of federal workers and impacts on private-sector contractors. After all, the sequester just kicked in a week ago.

Krueger is right on the economics. The jobless rate is a lagging indicator of the economy's actual state, since employers generally have to be convinced that the customer demand they're seeing is real and sustainable before they hire new workers.

Meanwhile, the Republican position has been that high deficits have weighed down the economy, stymying growth and hastening the day of a fiscal meltdown.

Given that, the strength of the February report presented something of a challenge for Washington's GOP leadership, since it seemed to contradict their fundamental premise. And a statement from House Speaker John Boehner indicated that the Republican strategy is to stay with essentially the same Obama-is-hurting-the-economy message of the past two years:

"Any job creation is positive news, but the fact is unemployment in America is still way above the levels the Obama White House projected when the trillion-dollar stimulus spending bill was enacted, and the federal government's ongoing spending binge has resulted in a debt that exceeds the size of our entire economy. As 180 economists said in a statement this week, our spending-driven deficit threatens our economy, and responsible spending cuts are needed 'to help put the country on a path to a balanced budget within ten years.' "

Of course, as good as Friday's jobless report was, it was just one month's data. But if the coming months should bring a series of similarly strong reports, Obama might be in the quite ironic position of finding good jobs numbers making his own job more difficult.

And while a stronger economy could give Republicans more confidence that they could push for spending cuts without hindering growth, it could make it harder for them to make a convincing case that Obama's policies have damaged the nation's fiscal future in ways they need to undo.

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