Gibbs’ Unemployment Rate “Uptick” Comment Caused Market Consternation

According to Reuters, just before this morning’s jobs summit, White House Press Secretary Robert Gibbs told reporters he didn’t know what Friday morning’s unemployment number was, but:

“One payroll estimate came out … yesterday and it seemed to suggest that it might tick upward.

“What we have always said, we’re going to have to get to a level of continuing to make progress in seeing a decrease in the number of those who are unemployed each month, in order to see either stability in the jobless rate, or have to have that jobless rate tick down.”

Every year or so, at the request of clients, I talk to Administration officials about when they receive advance economic data. The uniform answer is that the Fed Chair and the Chair of the Council of Economic Advisers receive the data at 5 p.m. the night before and that the CEA Chair writes a short memo to the President and a few senior officials, which is conveyed between 5:30 p.m. and 7 p.m. depending upon what else is going on. A few key congressional staff get briefed a few minutes ahead of the 8:30 a.m. release, but they are sequestered with no means of communication until then.

Gibbs is far too professional a communicator to make an off-hand comment like that without being prompted. My guess is that White House National Economic Council Director Larry Summers put him up to it with the President’s assent and that this was done without knowing the unemployment number in advance. They suspect tomorrow morning’s number will be higher, and they want to diminish the political impact. If they’re wrong, it won’t hurt them. They saw the risk-reward in their favor, so Gibbs made the statement. Managing news expectations is as much a White House function as making policy is.

Disclaimer: This page contains affiliate links. If you choose to make a purchase after clicking a link, we may receive a commission at no additional cost to you. Thank you for your support!

About Pete Davis 99 Articles

Affiliation: Davis Capital Investment Ideas

Pete Davis advises Wall Street money managers on Washington policy developments that affect the financial markets. President of his own consulting firm since 1992, Davis Capital Investment Ideas, he draws on 11 years of experience as a Capitol Hill economist with the Joint Committee on Taxation (1974-1981), the Senate Budget Committee (1981-1983), and Senator Robert C. Byrd (1992). He worked in the House and Senate, and for Republicans and Democrats.

Davis brought the first computer policy model, the Treasury Individual Income Tax Model, to Capitol Hill in early 1974, when he became a revenue estimator on the Joint Committee on Taxation. He formulated the 1975 rebate, the earned income tax credit, the 1976 estate tax rates, the 1978 marginal tax rates, and the Roth-Kemp tax cut. He left Capitol Hill in 1983 for the Washington Research Office of Prudential-Bache Securities, where he advised investors for seven years.

Davis has long written a newsletter on the Washington-Wall Street connection for his clients; Capital Gains and Games is his first foray into the blogosphere.

Visit: Capital Gains and Games

Be the first to comment

Leave a Reply

Your email address will not be published.


*

This site uses Akismet to reduce spam. Learn how your comment data is processed.