A new jobs report comes out tomorrow morning. The White House is already trying to spin the numbers. Economic adviser Larry Summers says the employment situation may have worsened in February because of the weather. Hudson Institute economist Diana Furchtgott-Roth says that's baloney:
On March 5, we might find that jobs were lost and the unemployment rate rose in February. But that will be because of the continued uncertain direction of economic policy—including the possibility of tax increases, high deficits, environmental regulation, and expensive healthcare reform—and not because of the weather.
Whatever the February report shows, though, there is also some good economic news.
The Monster Employment Index surged in February, with increases across a range of geographies and job categories, suggesting that employers are starting to emerge from a long hibernation. The Index, compiled by online job service Monster.com, grew to 124 from 114, the highest reading since December 2008 and the largest month-over-month increase since the company began compiling the index in 2003.
For the last six months, the economy has been characterized by what Keynesians call a breakdown in Okun's Law. Basically, firms have been cutting workers, maintaining output, and generating profits. For a Minsky-Jones economy, this means that they are poised to expand. That is why I am more optimistic than standard forecasters for the next six months.
And of course, if health care reform is defeated, businesses will be spared tax hikes and regulations and further uncertainty. Which could lead to more hiring. That would be a silver lining for Obama -- and a reason for Republicans to be cautious.