Sluggish job growth a major challenge for Obama
Sluggish job growth a major challenge for Obama
CONNIE CASS,Associated Press
WASHINGTON (AP) — Nothing upsets a president’s re-election groove like ugly economic numbers.
A spring slowdown in hiring and a rise in the unemployment rate are weighing on President Barack Obama, while enhancing Republican challenger Mitt Romney’s argument that the Democratic incumbent is in over his head.
Some questions and answers about how Friday’s economic news may play in a close presidential race:
Q: How bad is this for Obama?
A: Pretty awful. Polls show Obama’s handling of the economy is his biggest weak spot. People in the United States overwhelmingly rate the economy as their biggest worry, and jobs are what they say matters most.
But the president still has time for the jobs outlook to improve. Five more monthly unemployment reports are due — the last coming just four days before the Nov. 6 election. The fall numbers will mean more when voters head to the polls.
Q: What can Obama tell voters if the job picture stays bleak?
A: After 3 1/2 years in office, it’s getting harder to blame the painfully slow recovery on the mistakes of his predecessor, George W. Bush. But Obama keeps reminding the public of how bad things were when he took office in January 2009. The economy was deep into the recession and losing jobs month after bleak month.
In contrast, over the past two years, Obama notes, businesses have been consistently adding jobs, just not as quickly as needed.
He’s also tried shifting blame to congressional Republicans, saying they’ve held up the recovery by refusing to pass most elements of his jobs bill. And he says some factors dragging down the U.S. economy are beyond a president’s control, such as the European economic crisis and fluctuating gasoline prices. The weakening economy in China and turbulence in the Middle East haven’t helped, either.
Q: Is Romney seizing this opportunity?
A: With both hands. The lousy jobs numbers fit neatly into Romney’s central campaign pitch: That guy doesn’t have a clue how to fix the economy, so let me get it done.
He called the jobs news “devastating” and a “harsh indictment” of Obama. Romney says his own experience with a private equity firm, making millions of dollars by overhauling struggling companies, taught him how to revive the economy and create jobs.
Q: So which guy do the voters believe?
A: It’s a toss-up so far.
There hasn’t been time to measure the impact of Friday’s figures. But in an Associated Press-GfK poll last month, people were split over who they’d trust most to handle the economy, Romney or Obama. Asked specifically whether they approve of the way Obama has dealt with unemployment, about half did and half didn’t, mostly along party lines.
Still, jobs are clearly a weakness for Obama. His poll numbers are stronger than Romney’s on many other qualities, such as which candidate understands regular people, is a strong leader and says what he really believes.
He may benefit from the perception that the mess is so big no one knows what to do. In an NBC/Wall Street Journal poll, two-thirds of those surveyed said they were only somewhat confident or not at all confident that Obama has the right goals and policies to improve the economy. Asked this about Romney, three-quarters were only somewhat or not at all confident.
Q: Sure, people care about jobs, but do they really follow the latest economic reports?
A: One number seems to break through: the unemployment rate. That easy-to-understand figure — representing what share of Americans are looking for work and can’t find it — edged up to 8.2 percent in May, from 8.1 percent the month before.
And Obama has yet to get it down to even the troublingly high 7.8 percent in place when he took office. (It zoomed to a peak of 10 percent in October 2009.)
Since the government began closely tracking unemployment in 1948, no president has won re-election with numbers as high as those Obama’s staring down. The champ is Ronald Reagan, who coasted to a second term in 1984 despite 7.4 percent unemployment in October. A far greater percentage of people were out of work in 1936, when Franklin Roosevelt won re-election in a landslide amid the Great Depression.
Prospects for the unemployment rate to drop sharply before November aren’t good. The economy needs to generate at least 125,000 jobs per month just to keep up with population growth — a mark it’s fallen far short of for the past two months. And it would take tens of thousands more jobs each month to bring the rate down.
Q: Couldn’t the economic outlook brighten before Election Day?
A: It might. Some economists think the weakness could be temporary, reflecting the fallout from an unusually warm winter and technical issues that can sway the government’s numbers. Consumer spending and exports remain solid, says Mark Zandi, chief economist at Moody’s Analytics, and the outlook may bounce back to last winter’s optimism.
Or the weak report could mark the beginning of a stall in the already sluggish recovery. Discouraging numbers can become a self-fulfilling prophecy. Just look at the way they drove the stock market down 275 points Friday, in the worst trading day of the year. That sort of thing rattles the business leaders who make hiring decisions.
Many of them are feeling uneasy about world events.
“Europe is the key swing factor,” Zandi said.
If Europe addresses its financial troubles, and keeps Greece in the eurozone, the financial markets are likely to settle, he said, and boost U.S. employers’ confidence. But if Europe slowly worsens, it will be a drag on the U.S. economy.
By Nov. 6, when a president is picked, the employment picture may look rosier — or glum.
Copyright 2012 The Associated Press.