Economists say jobs data to have little impact on US polls


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.