While the outlook for American workers may be improving, it is doing so very slowly compared with how fast the catastrophic recession cost jobs, according to economists on both sides of the partisan gap.
“If you look at this out of context, it’s a solid report,” said Heidi Shierholz, a labor economist at the left-leaning Economic Policy Institute. “If you’re looking in the context of the recession, it’s not what we need to dig us out of this huge hole.”
She estimated that the United States needs to create 9 million jobs to fill in the shortfall created by the downturn, and that, at this rate, the nation would not return to pre-recession unemployment rates until 2020.
The improvement in jobs amounts to “a good solid single — in a game where we are 23 million runs behind,” said Douglas Holtz-Eakin, president of theAmerican Action Forum, a center-right think tank, and director of the Congressional Budget Office under President George W. Bush. “Any celebration about this would be a triumph of low expectations.”
No president since Franklin Roosevelt has faced reelection with the unemployment rate as high as it is today, a fact that some have said bodes well for President Obama’s GOP challenger, Mitt Romney.
But if there is a connection between the unemployment rate and the election outcome, recent history suggests it may have more to do with momentum in the jobs market than the rate itself.
Three times since 1980, an incumbent president faced voters when the unemployment rate was over 7 percent.
In the 1980 and 1992 elections, the incumbents, Jimmy Carter and George H.W. Bush, lost. The unemployment rate had been rising or relatively flat across the 10 months preceding those elections.
In 1984, Ronald Reagan won. In that year, the unemployment rate had been sinking before the election, part of a steady two-year drop from a peak of 10.8 percent.
Not surprisingly, given the potential importance of momentum, Obama sought to depict the jobs figures as evidence that the economy was moving in the right direction — while Romney tried to portray the reverse.
“We’ve made real progress,” Obama told a crowd in Hillard, Ohio, referring to the fact that the economy has added 5.4 million private-sector jobs over the past 32 months.
The jobs report released Friday marked the third anniversary of the recession’s peak unemployment, when it hit 10 percent. It has drifted downward since then.
The unemployment rate in October did rise to 7.9 percent, up from 7.8 percent, but the reason behind the uptick suggested an improved job market: More Americans decided to look for work, though not all of them found jobs.