Obama's 'strong jobs growth' forecast: Technically, he was right
President Obama was credited with helping to fuel a rally in stock prices late Wednesday after he offered an upbeat preview of the May employment report.
"We expect to see strong jobs growth in Friday's report," Obama told an audience in Pittsburgh. "This economy is getting stronger by the day."
With many economists already forecasting a big payroll number, the president’s comments gave investors another reason to expect an upside surprise in the jobs report. The Dow Jones industrials closed up 225.52 points, or 2.3%, to 10,249.54 on Wednesday.
Well, the 431,000 net jobs gain last month was the biggest for any month since March 2000 -- so technically, Obama was right about “strong jobs growth.”
But most of those new jobs were temporary census-worker positions. Private-sector hiring added just 41,000 jobs, far less than the 175,000 Wall Street had expected and down from 218,000 in April.
Private-sector hiring clearly did not get stronger last month -- it got significantly weaker.
Investors turned absolutely morose over the dismal private-sector data on Friday, sending the stock market to its worst loss since May 20. The Dow plummeted 323.31 points, or 3.2%, to 9,931.97, its lowest close since February.
Bloomberg News asked the White House about Obama’s Wednesday statement. The response:
As for what information Obama had on Wednesday, an administration official who declined to be identified told Bloomberg that the president doesn’t see the monthly employment numbers until the night before they’re released. Until then, Obama is aware of independent economists’ forecasts for the jobs data, the official said.
Obama is “regularly discussing jobs with his economic team and the American people,” White House spokeswoman Amy Brundage said in an e-mail. “In the first five months of this year, the economy has created nearly half a million new private-sector jobs, and while we have a long way to go, we are encouraged to see our economy continue to grow.”
-- Tom Petruno
Photo: President Obama on Friday. Credit: Olivier Douliery / Abaca Press / MCT