Because Ben White at Politico is making the case that July's awesome job numbers will doom the Clinton campaign.
Friday’s surprisingly strong jobs numbers could carry an unwelcome September surprise for Hillary Clinton, courtesy of Janet Yellen and the Federal Reserve.
The July employment report showed a gain of 255,000 jobs, outstripping analysts' forecasts and offering a short-term boost to the Democratic nominee’s presidential hopes after a dismal reading last month on economic growth.
But it also raises the politically dangerous prospect that the Fed could boost interest rates in September, in the heart of the campaign. That could spook markets, slow already tepid growth and complicate Clinton’s path to the White House.
“No question this jobs report along with June has raised the likelihood of a September rate hike,” said Nariman Behravesh, chief economist at IHS. “If the next jobs report right before the Fed’s September meeting is also very strong, I would pull the trigger and say they are going to move in September.”
Though they will never say it publicly, Fed governors generally try to avoid inserting themselves into the heart of political campaigns with major policy decisions. That consideration has many economists assuming the central bank will wait until December to raise rates again. The Fed hiked rates by a quarter point in December of last year, the first increase in nearly a decade.
But if jobs and wage growth continue to climb, and the unemployment rate falls below what the central bank considers full employment, Yellen and her colleagues may decide they have no choice but to move in September to avoid falling behind inflation. Rates remain extraordinarily low and the central bank is eager to return to a more normal footing. It is far easier for central bankers to snuff out inflation before it starts then to fight it once it takes hold.
The decision in September could be an excruciating one both for the Fed and the Clinton campaign. “Every central banker worth their salt will tell you politics means nothing in their decisions. But in fact they would like to avoid moving so close to the election,” said David Page, senior economist at AXA Investment Managers. “If the August number comes in somewhere around 280,000 jobs, it could become quite awkward for the Fed.”
If we're producing too many jobs then the Fed will have to step in and raise rates, hurt the markets, slow down growth, and the Trump wins or something.
This is an argument that someone was paid to make.
Sure. The economy is always going to hurt Democrats.
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