With less than five days to go until America casts its vote for U.S. president, Friday's October jobs report could have a major impact on an election hinged upon the economy and, more importantly, employment.
After last month's highly-questioned jobs report, where only 114,000 jobs were added but the unemployment rate ticked down 3 percentage points to 7.8%, many have cried foul.
From Donald Trump to Jack Welch the shouts of conspiracy and manipulation were voiced. To many the only explanation was that the report was indeed "cooked."
"I agree with former GE CEO Jack Welch, Chicago style politics is at work here," Rep. Allen West, R-FL, posted on his Facebook (Nasdaq: FB) page after last month's strong report. "Somehow by manipulation of data we are all of a sudden below 8% unemployment, a month from the Presidential election."
Whether or not those numbers were manipulated, the fact remains that unemployment dropped below 8% for the first time in over three years.
That was a significant milestone for President Obama and revived his campaign following Mitt Romney's surge in polls since the first debate.
Another move downward in the unemployment rate, or simply staying below 8%, could be enough to clinch an election that has become almost a dead heat.
Spinning the October Jobs Report
If tomorrow's jobs report shows a decline in the unemployment rate, the president would be able to say he saw the country through the worst of the recession and brought unemployment down during his four years.
Critics say the president inherited a 7.8% unemployment rate, but that number is for January 2009. His inauguration took place Jan. 20, 2009 meaning President Obama was only in office for ten days that month.
If you take the February 2009 number as a starting point, the president took office when unemployment was 8.3% and close to 800,000 jobs were being lost every month.
Now unemployment is at 7.8% and on average 146,000 jobs have been added per month during 2012.
On the other hand Mitt Romney can make the claim that of the 8.8 million jobs lost since that start of the Great Recession in 2008, less than half have been added back. And even though unemployment has declined it is mostly due to people dropping out of the labor force, not job growth.
With that said, voters most likely have made up their minds -about 5% of likely voters are still undecided- and will interpret the numbers to support their beliefs.
"Most people have an impression of the economy and their minds won't be changed at this late stage. Only a dramatic headline on either number in either direction might move the dial a bit more," Harry Holzer, a public policy professor at Georgetown University in Washington told Reuters.
But those 5% undecided stand to be swayed depending on how the jobs report headlines spin the report.
"I'd expect that turnout factor to be more powerful among potential Romney voters reacting to a very disappointing [jobs] report than among less motivated Obama supporters," Jerry Webman, chief economist at Oppenheimer Funds told Yahoo! Finance.
U.S. Jobs Report Predictions
Other employment reports released this week fail to clearly indicate which way the October jobs report will go.
Thursday's ADP report showed that private employers added a better-than-expected 158,000 jobs in October. This was the first time ADP's report used its "new methodology" for calculating payroll numbers and the data is now taken from a larger sample.
Also released on Thursday were this week's initial unemployment claims. The 363,000 claims "beat" expectations just like last week's number initially did, until it was revised higher today, now showing a miss from original forecasts. (And you wonder where these manipulation ideas come from.)
October's U.S. jobs report will come out tomorrow (Friday) at 8:30 a.m. EDT and economists expect around 125,000 jobs to be added and the unemployment rate to tick up to 7.9%. But after last month's report where unemployment fell from 8.1% to 7.8%, anything is possible.
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