Economists say jobs data to have little impact on U.S. elections: Reuters poll

NEW YORK Fri Nov 2, 2012 7:08pm EDT

Job seekers stand in line to meet with prospective employers at a career fair in New York City, in this October 24, 2012 file photo. REUTERS/Mike Segar/Files

Job seekers stand in line to meet with prospective employers at a career fair in New York City, in this October 24, 2012 file photo.

Credit: Reuters/Mike Segar/Files

NEW YORK (Reuters) - Stronger-than-expected hiring by U.S. employers in October and a small increase in the jobless rate will have a neutral or insignificant impact on U.S. presidential elections next week, according to most economists surveyed in a Reuters poll on Friday.

Twenty-four economists said the payrolls data would have a "neutral" impact on next Tuesday's elections, while 15 said the data would have an insignificant impact. Ten economists said the data would have a significant impact, while four said it would have a very insignificant impact, and one said it would have a very significant impact.

The government said on Friday employers added 171,000 jobs last month, up from 148,000 in September. The unemployment rate in October edged up, however, by one-tenth of a point to 7.9 percent.

The boost in hiring was seen as a hopeful sign for a lackluster economy that has been a drag on Democratic President Barack Obama's re-election bid. Republican rival Mitt Romney has often pointed to persistently high unemployment as a failure of the Obama presidency.

"The reality is you had a mixed report from a mainstream media perspective. Sure you had better job gains, but the unemployment rate picked up as well," said Jacob Oubina, economist at RBC Capital Markets in New York.

"There are countervailing forces so the average voter might see a more nuanced result here," he said.

Separately, the median of forecasts from 45 economists was for the gigantic storm Sandy, which devastated New York City and the New Jersey coast early this week, to knock 0.2 percentage points off of fourth-quarter gross domestic product.

Forecasts for the impact on GDP ranged from subtraction of 0.5 percentage points to adding 0.5 percentage points.

Many economists cautioned, however, that the entire extent of the storm's damage was not fully known, and estimating its impact on growth was a dubious business at such an early stage.

Also, the median of forecasts from 46 economists in the poll was for the Federal Reserve's latest round of stimulus, known as QE3, to eventually total $615 billion. The median in a similar poll conducted October 5 was for QE3 to total $600 billion.

Under QE3, which was announced in September as an open-ended program, the Fed is buying about $40 billion per month of mortgage-backed securities.

Within the poll, primary dealers - the large financial institutions that do business directly with the Fed - are looking for an even larger QE3 stimulus program.

The median of forecasts from 15 of the 21 primary dealers was for QE3's eventual size to reach $1 trillion.

In the broader poll, 44 economists out of 55 expect the Fed to buy Treasuries under QE3 when its Operation Twist stimulus program expires at the end of December.

Under Twist, the Fed is selling shorter-dated Treasuries and using the proceeds to buy longer-dated U.S. government debt in a bid to lower longer-term interest rates like those on mortgages.

The Fed previously bought $2.3 trillion in mortgage and government debt in two rounds of quantitative easing.

(Reporting by Chris Reese; Additional reporting by Aakanksha Bhat, Ashrith Rao Doddi and Ruby Cherian in Bangalore; Editing by Richard Chang)

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Comments (2)
sylvan wrote:
Well, since Ben Bernanke is shouldering the work left undone by the worst US House of Representatives, ever, who still refuses to show up for work because they are mad about tea or something; I guess we will get more quantitative easement. The economy would have recovered by now if the uneducated idiots in the red states would quit voting based on what old men want to do with young women’s private parts. Our country has become as pathetic as the insane morons who deny science and logic, the American Taliban Tea Party whack jobs.

Nov 03, 2012 3:38am EDT  --  Report as abuse
AZreb wrote:
Also, the impending storm expected to hit the NE states may have a significant impact on the unemployment rate, depending on its damage.

Nov 04, 2012 8:08am EST  --  Report as abuse
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