Co-host Robin Roberts introduced Hobson: "She is president, also, of Ariel Capital Management. Let's start money first, Mellody. The first time in twelve years that the Democrats have control of the House, not sure what's going to happen in the Senate right now. What does that mean for the economy?"
Hobson: "It's probably going to be very good for the economy. If history is any indication, it's been clear that the economy likes it when the parties do not control both the House, the Senate, and the White House. And, basically, what happens, there's gridlock. And the gridlock means it's not easy to spend money, and its not easy to pass a lot of laws that makes it hard to run a business, and that's good for the economy."
Roberts: "And as far as the House is concerned, and now that you have Democrats that will be in charge of these very powerful committees, what programs do you see changing right away?"
Hobson: "Well, I think the one that the Democrats have made the most noise about is minimum wage. The minimum wage has not gone up in nine years. And if you look at it on an inflation-adjusted basis, it is at its lowest level since 1955. So it really has been hard for the rank-and-file American to do very well. They've been disappointed by this and I think they're going to go in and push hard for minimum wage to go up."
It's important to remember that Hobson is not just ABC's financial contributor, but also has been a significant financial contributor to the Democrats.
Days before the election, ABC economics reporter Betsy Stark wrote for "The World Newser" blog that the low unemployment numbers were dubious:
That surely is low unemployment by any historical measure. But the question many economists were asking this morning was... Can we really trust the numbers in the Bureau of Labor Statistics' report?
Along with that unemployment rate, the BLS also reported a dramatic revision to the payroll numbers for August and September. It revised September's number up almost 100 hundred thousand jobs. It revised the August number up more than 50 thousand jobs. The revised tallies portrayed an economy creating jobs at a powerful pace this summer. Really? Just a couple of weeks ago the 3rd quarter GDP report showed the economy barely growing this summer.The report -- particularly the low unemployment rate -- portrays a fairly robust economy while other recent economic data -- on GDP, retail sales, manufacturing and housing -- suggest an economy just muddling along.
The numbers are always subject to revision but the revisions in the last couple of months are really big; and they change the look of the job market from weak or so-so to healthy, even booming.
The BLS downplays the size of the August and September revisions. Angie Clinton, a senior economist, told me, "It happens. It's not that unusual." But the last time there was a revision as large as September's (plus 97K) was in April 1999 (plus 109K).
The BLS says the reason for the revisions is almost always the same: it surveys 400,000 companies each month and the numbers change as they process more of those responses: "We think we have a good methodology here," she says.
Private economists are more skeptical. Some wonder if the bright picture the BLS is painting is credible. Some suspect an anomaly in the numbers. But as economist Stuart Hoffman of PNC puts it: "Whether or not we believe it, that's the number and the BLS is sticking to it."
At a minimum, this is an economy throwing off mixed signals. And today's job report just adds to the puzzle.
