The jobs report suggests that the labor market continues to inch forward. The number of jobs created was 120,000, which is a bit below the market chatter, and well below what we normally see in a recovery. Hopes for a better number started to lift given other recent data.
A couple of things jump out of the tables First, the unemployment rate dropped to 8.6 percent. This looks like terrific news, but it is not, since a key driving force for the lower unemployment rate was a big drop in the labor force. The decline to 8.6 percent will likely be the headline, and it will be a nice test of liberal media bias, as one might expect many to cover the report as confirmation that Obama’s policies have saved us all from oblivion. Keep your eyes on the coverage, and see if it is as measured as the numbers suggest it should be.
The second thing that jumps out is that unemployment dropped a lot for men, and for whites, but not for women, teens, blacks and hispanics. If this dynamic continues, then we might see a pattern with an interesting political implication next year. As the recovery ramps up, it might be that middle class white men are the largest beneficiaries, making them the subgroup most likely to move toward Obama as the economy improves. That might call into question a strategy that writes off this segment of the electorate.
— Kevin A. Hassett is director of economic-policy studies at the American Enterprise Institute.