The July jobs report: Obama’s 255,000 problem
The first Friday of every month has become a tough time at the White House, as the release of the monthly jobs report has generally provided grim news about the state of the economy.
Today’s report — detailing the number of jobs created and the current unemployment rate for July — is a “good” month with 117,000 jobs added.
The political problem for President Obama? That’s still less than half the number of jobs — 255,000, according to Republican economic consultant Matt McDonald — that need to be created every month for the unemployment rate to dip below 8 percent by Election Day 2012.
And there’s very little historical evidence of a president — of either party — winning a second term with unemployment at those heights.
In an op-ed for the Post earlier this week. Lawrence Summers, formerly an economics adviser to Obama, acknowledged that “it would be surprising if growth were rapid enough to reduce unemployment even to 8.5 percent by the end of 2012.”
Summers added that there is “at least” a one- in-three chance that the economy could fall back into recession “if nothing new is done to raise demand and spur growth.”
In a memo anticipating the jobs report, McDonald wrote that the numbers will “help us know whether the disappointing last couple of months have really been just ‘bumps in the road’ or whether they represent yet another setback to reinforce the public disappointment.”
(By way of context, the economy created 217,000 jobs in April with unemployment at 9 percent. May saw just 25,000 jobs created with a 9.1 percent unemployment rate; June was even worse with 18,000 news jobs and unemployment at 9.2 percent.)
Tom Gallagher, a principal at the Scowcroft Group, argued that the unemployment rate is not the best predictor of political results; “Everyone looks at the [unemployment] rate [but] income or, even better, real disposable personal income is more relevant politically,” said Gallagher. “The two data series usually move together but may not over the next year.”
Whether the unemployment rate is the best predictor of future results or not, however, it is the number most often used as shorthand in the political arena for the relative strength (or weakness) of the economy.
Given the economic realities the country faces, it now seems increasingly likely that Obama will have to win reelection with unemployment in the neighborhood of 8.5 percent or higher.
No president in the modern era has been reelected with the unemployment rate higher than 7.4 percent — and that happened in 1984 because the unemployment trend line was headed in the right direction for Ronald Reagan.
The last several elections have proven, however, that the traditional methods of predicting winners and losers may be gone forever — lost amid economic turmoil, the rapidly changing demographics of the country and the increasing distaste that voters feel toward Washington and its political inhabitants.
Barack Obama changed the political calculus when he won the presidency in 2008. He may have to break more rules of the political road to claim a second term in 2012.
Huntsman defends Weaver: Faced with a tough story Thursday in Politico about John Weaver’s role in his campaign, presidential candidate Jon Huntsman stood by his top strategist, calling him “indispensable.”
“John Weaver is a critically important part of our team," Huntsman said, as quoted by MSNBC. "He’s our strategist, has been from day one, and he will be. He’s a great friend."
A former campaign aide dished to Politico’s Jonathan Martin about unrest in the Huntsman campaign, saying Weaver was at the heart of it. Huntsman’s campaign has painted the former aide, David Fisher, as a bitter ex-employee who threatened the campaign before going public with his version of events..
What’s bad for the Congress is bad for the Boehner: We discussed Thursday how Congress’s ratings are reaching new lows; as it turns out, so is House Speaker John Boehner’s (R-Ohio) and the tea party’s.
A new CBS News/New York Times poll shows Boehner’s disapproval rating rising from 41 percent in April to 57 percent now. That, you may recall, is very close to what we’ve seen from recently deposed Speaker Nancy Pelosi (D-Calif.) and former House speaker Newt Gingrich (R-Ga.).
The tea party also got a tough review, with its unfavorable rating rising from 29 percent to 40 percent over that same span.
Rep. Dennis Kucinich (D-Ohio) finds his audience in Washington state, where he says he might run for reelection.
New York Gov. Andrew Cuomo (D) distances himself from Obama’s economic policies.
The American Conservative Union, which just banned the gay Republican group GOProud from having a booth at the Conservative Political Action Conference, holds an uncomfortable meeting with the group.
Texas Gov. Rick Perry (R) calls a legendary Iowa activist.
Sarah Palin’s Wasilla hairdresser gets its own TLC show. This is not a joke.
Former state Sen. Mike Oliverio (D), who beat former congressman Alan Mollohan in a primary last year but lost to Rep. David McKinley (R) in the general election, may run again.
“Mystery firm gives $1 million to pro-Romney group, folds” — Dan Eggen, Washington Post
“Some states’ push for earlier primary creates headaches for GOP leaders” — Philip Rucker, Washington Post