Search This Blog

Friday, October 08, 2004

Good News for Kerry

Weak employment numbers in this mornings payroll survey as described by an Associated Press release:
Employment rises by 96,000 in September as jobless rate holds at 5.4 percent

WASHINGTON (AP) Companies added 96,000 jobs to their payrolls in September, fewer than economists forecast for the last employment report before Election Day. The figures underscored the modest hiring pace that has become an issue in President Bush's re-election bid.

The four hurricanes striking Florida and other coastal states the past two months appear ''to have held down employment growth, but not enough to change materially'' the overall jobs picture in September, the Labor Department said Friday.

The nation's civilian unemployment rate remained at 5.4 percent.

Job growth was weighed down by losses in manufacturing, retail and information services. September's net increase of 96,000 payroll jobs was less than August's rise, which was revised down in Friday's report from 144,000 to 128,000.

''I wouldn't want to be in President Bush's shoes. He had better prepare himself for an onslaught,'' said private economist Ken Mayland of ClearView Economics, noting Friday night's second presidential debate. ''The reality is that a 96,000 increase in a work force of a 131 million base is an anemic rise, and is in no way a satisfactory increase.''

The economy should be creating 250,000 jobs or more per month by now, he said. Economists predicted that about 150,000 new jobs would be added in September.

On Wall Street, the lackluster report pushed stocks lower. The Dow Jones industrial average was down 19 points in late morning trading, and the Nasdaq dropped almost 13 points.

With the new report, Bush heads into next month's election with a jobs deficit. Though 1.8 million jobs have been added to business payrolls in the past year, there are 821,000 fewer nonfarm jobs in the country than when Bush took office in January 2001. [...]
While very few people change their vote based on government statistics (and I personally view these particular statistics as practically meaningless), these statistics provide an opportunity for Kerry to hammer Bush in tonight's debate.

Perhaps that's why Tradesports' Bush presidential futures contract is trading down today, dropping below 60% chance of Bush winning. That's ironic because Donald Luskin has a column in the Nation Review Online that states:
Here's the record. From 1884 to 1940 -- the heyday of organized election betting -- there were 13 elections. In nine of them, the betting markets strongly favored one candidate by setting the odds at a 60% or greater probability a month before the election -- the favorite won in nine out of ten elections. Also, there were three very close elections, and the betting odds correctly put all three near fifty/fifty. For the remaining election, 1908, regulatory issues kept the betting markets from functioning until just before election day -- but the odds did call the winner correctly. [...]

Right now the election betting market makes George Bush the favorite to win re-election, with a probability of about 62%. That's above the threshold at which, a month out from the election, betting markets have only been wrong once in 116 years.

Today the dominant election betting market is, a Dublin, Ireland-based web site where you can bet on all manner of sporting, political and current events. Presidential bets at take the form of online futures contracts.
Now, of course the contract is below that threshold of 60% on the futures market, making it not such a sure thing that Bush is re-elected. In other words, Kerry's chances look better than they have in months. Bush is still favored, but maybe Kerry really is the strong closer everybody says he is. We'll see.

No comments: