the growth statistics are partly bogus.

having said that you are totally over estimating how bad the employment situtation is.

here are some numbers (BLS had data starting from 1948):

1948, truman wins 2nd term, 3.3% unemployment
1956, eisenhower wins 2nd term, 3.9% unemployment
1964, johnson wins 2nd term, 4.5% unemployment
1972, nixon wins 2nd term, 4.9% unemployment
1976, ford loses bid for 2nd term, 7.4% unemployment
1980, carter loses bid for 2nd term, 7.1% unemployment
1984, reagan wins 2nd term, 6.9% unemployment
1992, bush loses bid for 2nd tern, 7.1% unemployment
1996, clinton wins 2nd term, 5.0% unemployment

observations: 1) whenever unemployment has been above 7.0% the incumbent has lost, whenever unemployment has been below 7.0% the incumbent has won 2) other than this there is little correlation. unemployment was very low in 1948 yet truman won by only 4%. unemployment was very high in 1976 yet ford lost by only 2%. unemployment was very high in 1984 but reagan won by a land slide 3) unemployment is currently 5.6% and falling slowly which is much below 7.0% and much closer to the winners average than it is to the loosers average.

Uhh, there's been report upon report on how our current unemployment stats don't reflect the number of discouraged workers who have stopped looking for jobs. It's been all over the blog arena. Where have you been?

Check out http://www.epinet.org/briefingpapers/146/epi_bp146.pdf

Their estimate of the real unemployment rate is 7.3%

I wish they also collected information on wages for those jobs.

It'd be useful to see the median pay for jobs created or lost.

Does DoL or IRS collect or release information on payroll taxes? Looking at income tax withholding and SSI deductions month to month might shed some light on national wage trends.

for our purposes it irrelevant whether the unemployment rate given by the BLS is above or below the "true unemployment rate". the only thing that matters is whether the gap between the "true unemployment rate" and BLS's unemployment rate has changed over time. given the percentage of americans in self-employment has increased the gap has if anything decreased which would be good for bush.

if john kerry is the nominee which looks very likely then bush will beat kerry by about 8% of the popular vote. because of the wmd issue and budget issues bush's popularity has taken a hit but this hit will be mostly temporary just like the saddam boost wwas mostly temporary. also john kerry's popularity will start to go down as more "bad stuff" come out about him. this time four years ago bush was beating al gore by 10% of the popular vote, then the cocaine habit, the drunk driving, his poor grades, etc. came out. the stuff that comes out about kerry is going to be at least as damaging. for example most americans know kerry was a "war hero" in vietnam but they don't realize how involved he was radical anti-war movement after he returned and then there is his hypocrisy on the special interests/soft money issue which has already crept into the news a bit.

do not think that i want bush to win; i want him to lose, i just doubt that he will lose.

Zero the Hero,

My recollection is that Reagan's administration added all the military into the 'employed' category, which drives down the 'unemployed' percentage. Previously, people in the military were not considered part of the workforce, so a 5% unemployment rate in Truman's time is more like a 7% rate now (actually, I don't know the real numbers; that's a wild guess) in terms of people's dissatisfaction with the job situation.

On the other hand, the 'workforce' has increased in a lot of ways over the last fifty years. In Truman's time, a 5% unemployment rate meant that one household out of twenty had no income at all; a 5% rate now would not quite mean that.

Anyway, I agree that the correlation is not great between unemployment and re-election, but I also agree with Nathan Newman that something's gotta give in this economy; either jobs will be created, or consumer confidence will plummet. Or not, my record on predictions ain't great.

Thanks,
-V.

"given the percentage of americans in self-employment has increased"

What do you call an unemployed tech worker?
A consultant.

vardibidian,

the unemployment rate is (the number of unemployed)/((the number of employed)+(the number of unemployed)) so adding the military to the employed category would increase the denominator slightly which would slightly reduce the unemployment rate. so a 7% unemployment rate would become like a 6.9% unemployment. for a 7% unemployment rate to become 5% unemployment rate there would need to be like 50 million people in military which is obviously no where near the real number. also i would no be surprised if the BLS changes older numbers to reflect new methodologies.

you make a good point though about the massive increase in the number of households with two members in this workforce. this however means that unemployment under bush is even less of a problem than it seem in the historical comparasion.

finally you seem to think that consumer confidence is high - actually the conference board's consumer confidence index is only 96.8 which is slightly on the low side.

having said that i wouldn't be surprised if the economy does go downhill sometime in 2004 or more likely in 2005. unless the economy grows really fast and the budget is balanced in that way it will be necessary for the federal government tp do one of five things: 1) cut spending, 2) increase taxes, 3) allow interest rates to go higher 4) let the dollar faller even more or 5) a combination of the above. all of these options would slow growth however 5 would probably be the smartest thing to do. it is my guess that this is what the bush administration eventually will do 1, 3 and 4 although not 2.

kerry's standing in the polls has already fallen somewhat. a week ago kerry was beating bush by 7 or 8% of the votes. now according to newsweek he is winning only by 5%, according to time he is losing by 2% and according to fox he is losing by 4%. newsweek and fox have a reputation of being somewhat biased in favor of democrats and republicans respectively, so i trust the time poll the most. having said that i would think that these polls would be "scientific" enough not to reflect the political biases of the poll sponsers although apparently this is not the case.

I believe that there is tremendous growth in the casual sector of the American economy. In every big city, and increasingly in the suburbs, there are vast and increasing numbers of people working in the cash economy. The GDP measures their productivity but the employment figures don't reflect their work.

A nice index of the casual sector is the explosive growth in no-doc and low-doc mortgages, which are more or less the sole purview of people who make very good money in the cash economy.

The casual sector may be one of the main reason why we'll have to shift increasingly away from income and payroll taxes towards VAT, real estate and personal property taxes.