Friday's Sept. jobs report, the last before Nov. 2, is of keen interest to presidential candidates.
October 7, 2004: 3:56 PM EDT
WASHINGTON (Reuters) - With time running out before U.S. presidential elections on Nov. 2, Friday's report on employment -- the last one before voters go to the polls -- faces hard scrutiny as the candidates jockey over economic issues.
The Labor Department report for September comes hours before President Bush meets Democratic presidential contender Sen. John Kerry at a town hall debate in St. Louis, Mo., to be followed next Wednesday by another debate on economic policy.
The economy is central to a tight race between Bush and Kerry and will take on an even higher profile as it proceeds to a hard-fought finish.
Data from the past few months have been mixed. They could be interpreted either to make Bush's case that growth is on a sound footing or Kerry's contention that Americans have suffered because of inept economic policy.
White House hopes were high that the employment report will help ease some of the sting from the fact that Bush will be the first president since Herbert Hoover in the 1930s whose tenure has boasted no net new job creation.
Wall Street economists surveyed by Reuters on average forecast that 148,000 new jobs were created in September -- too few to shrink a relatively low 5.4 percent jobless rate and barely enough to absorb new entrants to the workforce.
That follows 144,000 new jobs in August.
Estimates on payroll growth range from a loss of 10,000 jobs in the period to a gain of 200,000, with economists either estimating a 5.4 or 5.5 percent unemployment rate.
Revisions to get attention
But nearly as much attention will be paid to revised data for the March 2003 to March 2004 period that the Bureau of Labor Statistics will publish, as it does each year at this time.
Administration officials hope the changes will imply a faster pace of job creation during that stretch.
The White House Council of Economic Advisers (CEA) circulated a memo this week estimating that payroll figures for that 12-month period could be revised upward by 288,000 jobs. CEA chief Gregory Mankiw conceded, however, that this was largely a "guess" with a margin of error up to 140,000 jobs one way or other.
A final revised figure will be established only early next year.
An upward revision might help narrow the difference between the Labor Department's two surveys on monthly employment -- one of businesses that shows net losses of 913,000 jobs since Bush took office in January 2001, and the other of households that shows the creation of about 1.9 million jobs.
Administration officials regularly suggest the best estimate of monthly job creation lies between the two measures, although private-sector economists broadly disagree and maintain the business payroll survey is the best gauge.
"We believe that most of the gap between the payroll survey and household survey is due to the household survey having its own measurement problems: In a time of tighter border controls, it is assuming too high a growth rate for the population," Lehman Brothers' economist Ethan Harris wrote this week.
Stormy weather
Analysts warn September's employment report may be whipsawed by hurricanes that lashed large parts of the southeastern United States for several weeks this summer, displacing many people from their homes and causing widespread damage in states from Florida to Louisiana and Georgia.
"The greatest influence to the September payrolls report, by far and large, has been the violent storms and hurricanes that have plagued the Southeast for the better portion of the last weight weeks," said economist Rich Yamarone of Argus Research Corp. in New York.
Yamarone is the lone economist surveyed by Reuters forecasting an actual net loss of jobs in September. Apart from the impact of the hurricanes, he added that U.S. companies lack incentive to step up hiring until they see convincing signs consumers will be spending strongly.
"There's no impetus for businesses to take on the extremely costly burden of new workers, given the sullen pace of aggregate demand," Yamarone said, adding that high health-care costs also appeared to be causing many companies to keep payrolls lean.
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