Jobless Trends and Elections
Byline: THE WASHINGTON TIMES
Contrary to the consensus estimates of economists, who projected payroll growth of 250,000 jobs in June, actual job creation decelerated sharply last month. The U.S. economy added only 112,000 nonagricultural jobs in June, while the unemployment rate held steady at a respectable 5.6 percent. Notwithstanding what apparently represents a temporary slowdown in job expansion last month, the evolving labor market has been exhibiting several favorable trends over the past year, both economic and political.
Monthly job creation during the second quarter, for example, averaged 260,000. That was more than twice the 122,000 jobs created on average during each month of the first quarter. Also, it was more than four times the monthly rate of job creation during last year's fourth quarter.
In addition, the unemployment rate, which had reached a cyclical peak of 6.3 percent in June 2003, has fallen about three-quarters of a percentage point over the last year. Interestingly, the 5.6 percent rate in June is actually lower than the June 1972 unemployment rate, which preceded Richard Nixon's landslide re-election. Perhaps more importantly, the current unemployment rate's downward direction correlates strongly with previous trend lines that yielded political success. Rising unemployment rates, on the other hand, generally produced political setbacks.
Thanks in part to ballot-box shenanigans, Nixon narrowly lost to John F. …