As I reported this morning, ADP, a private payrolls processor, said that 201,000 jobs were added to the U.S. economy in August. This contrasts with the 90,000-170,000 that economists surveyed by Bloomberg are expecting and would be a decent jump from July's 163,000 figure (that number beat expectations, by the way).
Regardless of who's number you think is most plausible, the unemployment rate, currently at 8.3 percent, isn't likely to move much, even if we're closer to ADP's figure than we are to the lower end of the Bloomberg survey.
That doesn't make tomorrow's report sound very exciting. But, actually, it is.
The Washington Post summarizes rather neatly why this report is such a big deal:
Friday’s Labor Department report is more eagerly anticipated than most. It is one of only three jobs reports remaining before the Nov. 6 presidential election. And it will come just hours after President Obama claims his party’s nomination at the Democratic National Convention, capping a meeting where Democrats have argued before the nation that the economy , while struggling, is on the right track.
So there you have it. Meanwhile, the U.S. economy, while still growing, is expanding at an anemic pace — less than 2 percent for the first half of the year. In order to lower employment substantially, we need to grow at 4-5 percent, adding 350-400,000 jobs per month. Obviously, we're pretty far from that. In fact, our labor participation rate is as low as it's been since the early 1980s. People have given up on the job search.
I was surprised last month when sluggish growth managed more than 100,000 for the month. I'm prepared to be surprised again. But it's worth noting that even though a 200,000-job August could given the President a nice addition to his potential post-convention bump, it could also discourage the Federal Reserve from undertaking another round of "quantitative easing" — injecting money into the economy to stimulate growth — after it's meeting next week. The stock market rally that such a move would probably create could be better for the President's re-election hopes than an August jobs report at or above 200,000.
As usual, I'll be on dawn patrol when the Labor Department released the report, at 8:30 a.m. ET/5:30 a.m. PT.