msnbc | November 01, 2012
>>> we are less than 24 hours to the last unemployment report before tuesday's election. there's good news to report on that jobs front. the labor department reports that applications for unemployment benefits dropped by 9,000 last week. payroll provider abp says business added 158,000 jobs in october. now, today also brought some good numbers on consumer confidence , which could spell and should spell good news for retailers. professor, it's great to have you here. these numbers, as we look ahead to the unemployment report, what can we glean from this?
>> thomas, this is probably the most important unemployment report in years. many people anticipating the november 2nd report assumed that the race would be a little bit, well, either obama or romney would be farther ahead. but this report comes four days before election day . the entire campaign, really both campaigns, are premised on the notion of either the economy is growing or it's not growing. either jobs are coming back or it's not coming back. the assumption among most economists who are looking at this is that the establishment survey, the survey of the employers, will show about 125,000 new jobs created in october. and th and that the unemployment rate will stay close to what it was, about 7. %. the real issue is the direction of the unemployment report. if it looks like things continue to get a little bit better, that improves obama's chances. that improves the president's chances. if it looks like things are getting worse, however, that really does lend some credence to former governor romney's view that things are not what they should be.
>> professor, what about sandy? any disruption it could add to the accuracy of the reading, the jobs report itself?
>> the surveys were done before sandy. i don't expect sandy is going to have much influence. i don't think it's going to have any influence on the employment report. it will be for october, but most of the surveys were done in mid or in the third week of october, before sandy had any effect.
>> all right. so let's talk about what's ahead after this. we talk about the fiscal cliff that is looming. another debt ceiling debate waiting for all americans on capitol hill . what's out there that could send the unemployment rate back up?
>> uncertainty about the outcome of the fiscal cliff. now, americans are mostly now, obviously, they're looking at the election. people are not talking about the fiscal cliff. consumer confidence is up. in part because nobody has paid much attention. but unless nothing is done before january 1st , we are going to see taxes rise on most people because that's the end of the payroll tax cut that president obama and congress agreed to. that also means that the end of the bush tax cuts , not only for people over $250,000 of income, but also everybody else who were to some extent, their taxes were also reduced by the bush tax cut . the alternative minimum tax , that also would kick in. there's no alternative to the alternative minimum tax on the table. so you have the typical family after january 1st seeing a tax hike in the range of $ 1500 to $3500 for the year 2013 . now, i expect congress is going to do something, if it doesn't act before january 1st , it's probably going to act sometime in january and then make what they do retroactive to january 1st .
>> all right. looking at the long-term and the short-term. we're going to know what those jobs numbers are tomorrow. great to see you, as always. thank you.