Hi everyone, I'm Sam Shirazi and this is Federal Fallout the 2025 Virginia Elections. This is a special bonus episode where we will go over some drama at the Bureau of Labor Statistics. Now I know that sounds pretty random, but there were some things that happened on Friday that I thought would be interesting to talk about and then also talk about how it might play out in the Virginia Elections.

00:24.39

Sam Shirazi

So for some background, the Bureau of Labor Statistics. It's an office within the Department of Labor. It sounds pretty you know statistical, which it is, and the random government agency, but actually they the thing they're best known for are their monthly jobs reports. And that is often looked the media and the markets to see where the economy is, specifically with jobs and the unemployment rate and how many jobs have been created each month.

00:52.12

Sam Shirazi

And usually there's a little bit of news they release the numbers. It's not necessarily the biggest thing in the world. Unless there's a huge fall ah in unemployment or a huge gain in unemployment, it usually gets a few headlines, but it's not that big of a deal.

01:07.04

Sam Shirazi

But on Friday, we got some news from the Bureau of Labor Statistics that caught the attention of the news, the markets, and ultimately the president of the United States. So the headline number was that in July, there were 73,000 new jobs, which you know was a little bit weaker than expected. But I think the big news from this jobs report was the numbers in May and June were significantly lower.

01:31.96

Sam Shirazi

revised to be much less. So according to the Bureau of Labor Statistics, in May there were just 19,000 new jobs and in June there were just 14,000. So that means that in the past three months there have been less than 100,000 jobs created which is not a great number because typically when the economy is doing pretty well, there are at least 100,000 jobs being created a month.

01:56.02

Sam Shirazi

And so now over a three-month period, we've had less than 100,000, according to this latest report from the Bureau of Labor Statistics. ah you know Obviously, the markets were a little bit spooked by that because it shows the economy is not doing great.

02:10.46

Sam Shirazi

And the news was talking about how the economic outlook may not be so rosy. You know, there's probably a lot of different factors. And i'm this isn't a business or economics podcast. But

02:24.36

Sam Shirazi

President Trump has again increased tariffs on various countries, including Canada. And so that is probably in the background, some of the uncertainty with the tariff rates and that generally may be hitting businesses when they aren't exactly sure what the tariff f rate is going to be from one day to the next.

02:42.92

Sam Shirazi

But frankly, I mean, this is not necessarily the biggest news in the world. There's a lot of stuff going on every day. Yeah, it's kind of interesting, but you know in this kind of news cycle, there's some news and then people move on.

02:55.94

Sam Shirazi

And for the most part, probably no one would have remembered this tomorrow morning except something the president Trump did. So President Trump, he fired the head of the Bureau of Labor Statistics because according to President Trump, he didn't believe that the numbers were accurate.

03:11.69

Sam Shirazi

And he felt that maybe the numbers were being ah manipulated for political reasons because the current head of the Bureau or the former head of the Bureau of Labor Statistics was appointed by President Biden.

03:23.33

Sam Shirazi

Although it is important to note that she was... confirmed overwhelmingly by the Senate, including with several Republican senators, such as j then Senator J.D. Vance. So anyways, typically the Bureau of Labor Statistics is viewed as pretty nonpolitical.

03:39.18

Sam Shirazi

i think traditionally there's been this expectation that they would not be fudging the numbers and that they would be just reporting the numbers because the markets rely on those numbers. Businesses rely on those numbers.

03:52.42

Sam Shirazi

State governments rely on those numbers. So they are important for the broader economy. And it's important that those numbers are accurate. Now, President Trump doesn't feel they're accurate. Obviously, it's going to be interesting to see what the future reports look like. Are there any changes?

04:08.45

Sam Shirazi

And do people start maybe questioning the numbers if for whatever reason they think they're being manipulated for political reasons by the Trump administration? But Regardless, a lot of stuff going on with the unemployment rate and the Bureau of Labor Statistic Reports that came out on Friday.

04:26.54

Sam Shirazi

You know, I think part of this is this broader debate about the economy. You when the party that is in the White House, they typically want to paint a rosy picture of the economy. They want to say the economy is doing great.

04:37.56

Sam Shirazi

The party out the White House wants to say the economy is not doing well and things aren't great. And, you know, sometimes it's not that complicated. So if the economy is doing really well, unemployment's low, jobs are being created, inflation's low, stock market's doing well, you know, it's pretty obvious that the economy is doing well.

04:56.08

Sam Shirazi

When the economy is not doing well, unemployment's going up or inflation's going up, stock market's not doing well, then it's pretty obvious the economy's not doing well. I think ah for a while we've had this weird economic situation where, know,

05:08.68

Sam Shirazi

The general unemployment rate has been low. Obviously, inflation had been high for a couple of years, but the inflation has come down and inflation is lower than it used to be. So while some of the macroeconomic numbers look OK, people generally don't feel great about the economy. Obviously, there was a bump in costs because of inflation and the housing market has been expensive and interest rates are high. So people just aren't able to afford things, aren't able to buy a new house.

05:36.49

Sam Shirazi

So that kind of drags the sense of where people think the economy is. And of the problem Democrats and in 2024 was the economy Even though the Democrats and President Biden and Vice President Harris were talking about some of the broader economic numbers, unemployment rate was relatively low and inflation was coming down. People didn't feel like we had this great economy. And that was part of what led the Republicans to win the 2024 election.

06:00.44

Sam Shirazi

And now that they're in power, I think President Trump's having this difficult situation. is in this difficult role where he's trying to say, well, things are actually really good and the economy is great because I'm in charge.

06:11.75

Sam Shirazi

When in reality, some of these broader issues haven't been fixed. You know, interest rates are still but relatively high. Obviously, President Trump would want them to come down. And he's been criticizing the Federal Reserve Chairman Jerome Powell for not lowering interest rates. But it is what it is.

06:26.83

Sam Shirazi

Inflation, you know, It has come down from the highs in 2022, but it's still elevated above 2%. There's been recent rises in inflation. It's hard to know if that's a long-term trend or just kind of a bump over the summer. But prices are still expensive for people. And now with this latest jobs report, it seems like a job market is not doing that great and there aren't that many jobs being created.

06:51.37

Sam Shirazi

And then to top all that off, there's also the tariffs in the background. And, you know, there's an increase in the tariff rates for some countries that happened on August 1st. So just a lot of stuff happening in the economy. And I would say, you know, it overall, Trump's approval rating from when he came into office to now has come down. And the primary reason it's come down is the economy.

07:11.27

Sam Shirazi

I think some of those... voters that were willing to go with President Trump in 2024 because they thought he'd be better for the economy. Now they don't really feel like the economy is getting that much better.

07:22.32

Sam Shirazi

And so they're basically blaming him. And so they might have gone from being an approved Trump voter to maybe now they're disapproving of President Trump. this news with the beer Bureau of Labor Statistics and the unemployment rate and the job numbers is not going to help any of that where people have anxiety about the economy.

07:40.23

Sam Shirazi

And so, like, let's shift to Virginia, because obviously this is going to be an issue on the campaign trail. You know, there's an old adage that comes from basically the 1992 election where some of Bill Clinton's advisers, they said it's the economy stupid. So, you know most elections, economy is an important issue.

07:59.94

Sam Shirazi

And certainly in 2024, it was top of mind for many voters. And I think 2025 in Virginia, the economy is going to be an important issue for obvious reasons of some of the federal cuts have really impacted Virginia.

08:12.62

Sam Shirazi

This podcast is called Federal Fallout because a lot of the premise of the podcast had been that much of the changes to the federal government was going to impact Virginia and it was going to be felt in the elections this year.

08:23.94

Sam Shirazi

And I think some of this stuff with the unemployment rate at the national level and the jobs report has been reflected in Virginia. So Virginia traditionally has had lower unemployment rate than the nation.

08:36.10

Sam Shirazi

And that's still true. However, in January, the unemployment rate in Virginia was 3%. And in June, it was 3.5%. So while it's still relatively low, I mean, that's not an insignificant increase in the unemployment rate. And there's a a clear trend where the unemployment rate in Virginia continues to go up.

08:54.99

Sam Shirazi

And so I think that kind of affirms maybe some of the numbers that we're seeing from the Bureau of Labor Statistics at the national level that, yes, the job market's not doing great because we're seeing that in Virginia. Obviously, Virginia has been impacted by the federal cuts, both to the contracts and then also directly people being laid off and riffed at the federal government.

09:14.54

Sam Shirazi

And I also wanted to talk about one other thing in this context, which is the a report from the Washington Post where they basically came up with the number of people that took the original Doge fork in the road. So the fork in the road offer was basically a buyout or I think technically it was called a deferred resignation program where People would resign their job in the government, but they would get paid while they're technically on the government payroll. They wouldn't be working.

09:45.81

Sam Shirazi

And that that offer is good until September 30th. So there's a lot of people still getting paid. even though they're not technically doing any work for the federal government. And the Washington Post reported there were about 154,000 people in that position.

10:00.77

Sam Shirazi

Certainly in Virginia, there's probably at least thousands, if not tens of thousands of people who currently are getting paid, even though they're not working for the federal government. And importantly, those people are not reported as unemployed and they don't appear in the these unemployment reports. So obviously some of those people are going to probably find other jobs in the private sector.

10:22.34

Sam Shirazi

Some of those people were, and and frankly, a lot of them were probably closer to retirement age and some of them might just decide to retire. And so at the end of September, you're going to see that hit both in terms of people not getting the paychecks anymore from the federal government But also just the reality that some of those people are going to be counted as maybe unemployed. And so you have this number of 154,000 people in the economy who technically are getting paid, who are technically not unemployed. They're still on the rolls, but basically will not have a job, at least that that job, at the end of September. So a lot of things going on.

10:59.42

Sam Shirazi

I think sometimes we may overthink elections. And what I mean by that is just a lot of these elections, you can focus on the looking at how the economy is doing. So I think in 2024, despite what the Democrats thought were good macroeconomic numbers, the reality is several years of elevated inflation had taken their toll and the Democrats just couldn't Overcome that in the 2024 election.

11:25.02

Sam Shirazi

So maybe, you know, all the think overthinking of the election and the prognostication about the election was really it really just came down the economy and it wasn't super complicated.

11:36.12

Sam Shirazi

Similarly, in 2025, I mean, we're obviously talking about a lot of different things with the Virginia elections and this campaign and that campaign. And obviously all that stuff is important, but maybe to a certain extent, the campaign just fundamentally comes down to the economy and specifically the Virginia economy and the hit that it's taken because of some of these cuts at the federal government.

11:55.77

Sam Shirazi

So while I don't always talk about it, it's not like every episode I'm talking about the Virginia economy. I do think it's an important factor when you're looking at what's going on this year in Virginia, while you're looking at the polls, you're looking at the fundraising, you're looking at all these ah ah other metrics that You know, the unemployment rate in Virginia is ticking up.

12:13.05

Sam Shirazi

It's still relatively low, but you can't pretend like a increase in the unemployment rate isn't going to mean anything in an election like this. So certainly a lot going on both nationally and in Virginia that is affecting this race from the economic standpoint.

12:30.13

Sam Shirazi

And I guess the last thing I should note is that September 30th date is interesting because it is right at the start of early voting in Virginia. And maybe this election really will just come full circle in January and February.

12:43.43

Sam Shirazi

a lot of what was dominating things in Virginia were the doge cuts. And while that's died down a little bit. I do think that that September 30th date will be significant because a good chunk of those people are probably not going to get the same salary that they had when they were working for the federal government, either because their new job pays less than their their previous job, they might not be able to find a job, and or even if you retire, you know you're not going to be making the same amount of money. So if you think about people that were working for the federal government who will no longer be working for the federal government on October 1st, it's a huge amount of people, 154,000 people be

13:24.39

Sam Shirazi

who will not be working for the federal government anymore. And that's right you you know at the crunch of the campaign. Now, 154,000 of those people are in Virginia. I don't know the exact number, but I suspect it's not an insignificant amount of people who are in Virginia who will be in that boat.

13:40.93

Sam Shirazi

and you know the reality is if people are not feeling great about the economy, then that's going to be weighing on voters when they go to the polls in this fall.

13:52.62

Sam Shirazi

And ultimately, as I mentioned, I think part of the challenge in a campaign when you are running in this environment, if you are the Republicans, is you want to talk about various issues which you think are winners for you, whether that's crime, whether that's immigration, whether that's trans issues.

14:09.48

Sam Shirazi

You know, they have a number of issues where they think they're strong on and they want to run on and they want to attack the Democrats. And that makes sense. You know, every campaign has the issues they want to run on. I think the problem is sometimes external events or just the reality of what's on people's minds is not what you want to talk about and it's not necessarily your strong suit.

14:29.63

Sam Shirazi

And so if voters are worried about the economy or they're worried about the federal cuts, you know, what is your response to that? And it's hard. There's often not a great response if you are the party in the White House and voters are holding you accountable for the state of the economy.

14:44.81

Sam Shirazi

And, you know, I go back, I've talked about this before, there was the 2009 election in Virginia where Crédit was running for governor. And, you know, a lot of people at that point were starting to blame President Obama for the state economy. Now, realistically, the economy had crashed the year before under President Bush.

15:02.86

Sam Shirazi

But the reality is voters, you know, they're feeling the pain and they're seeing the party in the White House and willing to try the opposition because they haven't necessarily seen the improvement that they'd like.

15:17.45

Sam Shirazi

And whether it's the party in the White House's fault or not, that's just how voters think. They think, you know, President Trump's been in office for a year or almost a year and things haven't gotten that much better for me. Might as well see what happens with maybe voting for the Democrats.

15:31.47

Sam Shirazi

And it's hard. It's hard when you're running in that environment. I think it's another thing to look at this year in Virginia. And part of the reason maybe the Virginia Democrats are favored. And if you think about 2017, that was a year when Ralph Northam won by 9%.

15:46.81

Sam Shirazi

nine percent November 2017, unemployment rate was relatively low. Inflation rate was low. Economy was doing pretty well, but still the Virginia Republicans didn't end up doing that well in that election. So I think it just goes to show you that why things are or even more difficult this time around when you're having these federal cuts, you're having maybe some shaky economic news.

16:12.21

Sam Shirazi

You have a Democrats, pretty organized, pretty motivated to vote. The Republicans, as we've discussed, have had some issues with their ticket, although it seems like they've kind of gotten their act together. So all that's to say is, you know, again, I don't talk about it every single episode, but it is important to keep in mind the economy is there for a lot of voters.

16:31.27

Sam Shirazi

You know, they're struggling to get by It's the top concern for them. And it's easy to just focus on other things or not necessarily talk about it every week. But it might be the deciding factor when people go to the polls in the fall.

16:45.36

Sam Shirazi

And early voting, you know, we're now in August and early voting is next month, which is pretty crazy to think about. We're a few weeks away from early voting. So elections coming up, things are getting baked in and there's not a whole lot of time to change.

16:59.27

Sam Shirazi

people's perceptions on the economy, people's perceptions on the election. So we'll just have to wait and see. I thought it was an interesting week, as always, in the political world. And I will try to do my best to cover it here in Virginia. So that has been Federal Fallout, and I will join you next time.

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit samshirazi.substack.com