It's election year and there is one issue, as is usually the case, on the minds of voters.
It's the economy, stupid.
Both the tax rate and unemployment rate are typically of highest concern. But it is the jobless rate, in particular, that has become a barometer for how likely it is for the incumbent to remain in the White House.
No president has won re-election with unemployment above 6% since World War II, with the exception of President Reagan in 1984, who won despite a jobless rate of 7.2%, reports Bloomberg.
President Obama looked to be in trouble at the beginning of last year; however, now the economic situation does not look as dire and the jobs picture seems to have hit a turning point. (See: U.S. Recession Averted, But Curb Your Enthusiasm: Daniel Gross)
Last month the U.S. economy added a much better than expected 200,000 jobs while the unemployment rate fell 0.1% to 8.5%. And the unemployment rate has fallen every month since September's 9.1% key jobs number.
Obama is optimistic that unemployment can break 8% by Election Day. That means the economy must add roughly 250,000 jobs a month until November, which is somewhat of a long stench.
But what really matters more than the rate of unemployment is the trend, says Potomac Research Group's Chief Political Strategist Greg Valliere. And right now that is in Obama's favor. If the trend continues its downward trajectory "I think that...can help Obama," he says.
The GOP Firing Squad
Recent headlines suggest that economy may be on more stable ground, but the Republican candidates running for president do not think Obama is responsible.
"I think our economy is overcoming what Barack Obama is pushing in its place," Rick Santorum told The Wall Street Journal while campaigning in New Hampshire Friday reports The Hill. "I'd like to see that labor force participation go up a lot more, which is continuing to be problematic."
After the positive December jobs number, Newt Gingrich called the situation a "tragedy" while Mitt Romney released this statement:
"Of course it is good news fewer Americans are out of work, but thirty-five consecutive months of unemployment above 8 percent is no cause for celebration," Romney said. "Under President Obama, we have lost 1.7 million jobs — America deserves better. Eventually our economy will recover, America always does. But President Obama's policies have slowed the recovery and created misery for 24 million Americans who are unemployed, or stuck in part-time jobs when what they really want is full-time work. As President, I will refuse to accept high unemployment as the 'new normal' for our economy."
Obama will surely not take that type of rhetoric sitting down. Democrats, and even some of Romney's GOP opponents, have accused him of killing jobs and shipping them overseas while he held the top post at private equity firm Bain Capital.
Obama: Bring The Jobs Home!
On Wednesday Obama held an event at the White House with the CEOs of 14 companies entitled "Insourcing American Jobs" as a call to corporate America to begin bringing jobs home.
"I'm calling on those businesses that haven't brought jobs back to take this opportunity to get the American people back to work," Obama said in prepared remarks. "That's how we'll rebuild an economy where hard work pays off and responsibility is rewarded -- and a nation where those values live on."
Recent forecasts by Jefferies Chief Equity Strategist Sean Darby and the Boston Consulting group indicate that the decline in American manufacturing may be over and that insourcing could be the next new trend.
Whether or not Obama is responsible for the current economic progress, he will definitely take credit for it, says Valliere who also has some advice for the president: embrace the improvement and avoid using phrases like "things could be worse." Because the reality is, should the economic momentum slow, things could be a lot worse.
- Politics & Government/Unemployment
- Politics & Government
- President Obama