Potential job adjustment of 818,000 might not raise alarm bells for economists, but it poses a challenge for Vice President Kamala Harris.
At a critical political juncture, fresh data emerges, with Vice President Kamala Harris aiming to gather steam as the new Democratic presidential nominee and alter voters' beliefs regarding the Biden administration's economic performance.
The White House, including Harris, is grappling with the challenge of convincing the public that despite widespread and persistent concerns about the US economy, things are actually progressing favorably, and inflation has been contained without adversely impacting the job market significantly.
During the Democratic National Convention on Monday night, President Joe Biden boasted about creating 16 million new jobs, rounding up from the actual figure of 15.8 million. However, this claim was soon debunked, following the publication of the BLS report on Wednesday.
Even creating 15 million new jobs is a significant achievement, far surpassing the 6.9 million jobs created during former President Donald Trump's tenure, after accounting for pandemic-related job losses.
The Democrats have gained traction in the presidential race with Harris stepping up for Biden. According to an ABC News/Washington Post/Ipsos poll released on Sunday, she leads Trump nationwide among registered voters.
However, Trump holds a 9-point advantage on the two most important issues according to Americans – the economy and inflation, as per a July Gallup poll.
Several Americans have rated the US economy as poor or terrible for most of the past year in a Gallup poll. Any negative economic developments in the forthcoming months may offer an electoral edge to Trump.
Race and the political battle for jobs
Trump frequently alleges that the majority of jobs created under the Biden administration have been filled by undocumented immigrants, a claim that CNN has fact-checked as false. Nevertheless, the number of foreign-born workers has risen more than the number of native-born workers over the last few months, as reported by CNN's Tami Luhby in June.
Trump has attempted to sow discord amongst Democrats by stressing that undocumented and foreign-born workers are taking away “Black jobs” and “Hispanic jobs,” as he alleged during a CNN presidential debate in June, when Biden was still running for the presidency.
Michelle Obama touched upon this issue during her DNC speech on Tuesday, stating that Trump is intimidated by her and her husband – two “hard-working, highly educated, successful people who happen to be Black.”
“Who will tell him that the job he’s currently seeking might just be one of those ‘Black jobs’?” she questioned.
Anticipated positive development
There's one promising piece of news that most economists expect before the election – the Federal Reserve might reduce interest rates in September.
The mere expectation of a rate cut has already decreased mortgage rates. A subsequent rate cut could further lower borrowing costs and stimulate job growth and overall economic expansion.
Differing economic agendas
If Trump wins the election in November, he plans to impose tariffs on a wide range of imported goods, which may drive up costs but potentially motivate more domestic production. He also advocates for making expiring tax cuts permanent and further reducing taxes. Read more about Trump’s tariffs proposal.
Harris, on the other hand, aims to prolong tax cuts for most Americans but intends to increase taxes on the wealthiest Americans. She also supports tax credits to assist families with children and first-time homebuyers – generous but costly proposals. Read more about Harris’ economic platform.
Neither Harris nor Trump have a credible strategy to address the swelling national debt.
The rationale behind the job data modification
As per CNN's report, Alicia Wallace explains the motivation behind the new data:
Every year, the BLS conducts a review of data from its monthly survey of businesses' payrolls, then aligns the March employment level with those measured by the Quarterly Census of Employment and Wages program.
The preliminary data indicates the largest downward revision since 2009 and suggests that the labor market wasn’t as scorching hot as initially believed. However, employment growth was still historically robust.
The data will be revised again and finalized in February.
Trump accused the administration of manipulating employment statistics absent any supportive evidence. It appears like a plot to rig the numbers would revise them up, not down. And it is not a leak, as Trump suggested.
This is an annual revision – it is by no means an attempt from the Biden administration to conceal any negative data about the economy, according to Wallace.
The ongoing political debate around the US economy's performance has led Vice President Harris to aim for a stronger presence, aiming to shift voters' perspectives on the Biden administration's economic management. Amidst these political maneuvers, the issue of immigration and job creation, particularly for minority groups, has also become a focal point in the political discourse.
