Lukewarm jobs report awaits US as campaigning climaxes
By Lucia Mutikani, ReutersWASHINGTON--U.S. job growth likely picked up in October, but not enough to prevent the unemployment rate from rising off a near four-year low, although that might not matter for next week's presidential election.
November 1, 2012, 1:09 am TWN
Coming four days ahead of the tight contest, the closely watched employment report on Friday is not expected to shift much from its recent pattern, limiting its impact on voters.
Employers are expected to have added 125,000 jobs to their payrolls in October, up from 114,000 in September, according to a Reuters survey of economists. The unemployment rate is forecast to tick up a tenth of a percentage point to 7.9 percent after a dramatic 0.3- percentage-point fall in September.
“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,” said Harry Holzer, a public policy professor at Georgetown University in Washington.
The latest Reuters/Ipsos daily tracking poll showed the race between President Barack Obama and Republican challenger Mitt Romney as a virtual dead heat just a week before the Nov. 6 vote.
The Labor Department said it intended to release the October jobs data on Friday at 8:30 a.m. (1230 GMT), as scheduled, even though monster storm Sandy forced the government to shut down for two days.
Jobs growth has fizzled since accelerating in the first two months of this year. Economists point to fears over Europe's debt crisis, the prospect for a sharp tightening of the U.S. government's budget and a lack of clarity over financial and health care regulation.
“Consumers are spending, but businesses are cautious about hiring because there is a lot of uncertainty related to the election, the fiscal cliff and regulations,” said Sung Won Sohn, an economics professor at California State University Channel Islands in Camarillo, California.
The fiscal-cliff — automatic tax hikes and government spending cuts that will suck about US$600 billion out of the economy next year if Congress fails to act — led businesses to cut spending in the third quarter for the first time in 1-1/2 years.
Although the economy has created more than 4 million jobs since the 2007-09 recession ended, employment remains about 4.5 million jobs short of where it stood when the downturn started.