On the June Jobs Report, and Our 2020 Election Model

Enormous payroll gains strongly surpassed an already bullish consensus, and a drop in the unemployment rate that can’t be explained away by methodological errors. The V-shaped recovery is on. Our quantitative election model shows Trump gaining 210 electoral college votes from this morning’s number, but still losing in November. It would take another 8 million payrolls for the model to show a tie, all else equal, and this is not at all an impossible goal. There will be two GDP reports before the election – one horrible and one great – which will strongly move the model. Mr. Market is probably not focusing on election risks yet. Trump is not as down-and-out as it may seem. His approvals are higher than Biden’s – and Trump hasn’t even begun to focus voter’s on Biden’s deficits. Biden is being forced to select a running mate who may end up driving strong Trump turnout.