By noon, President Obama, whose reelection chances have been threatened by the nation’s economic woes, seized on the figures as proof that the recovery from the recession “is speeding up.”
“This morning we received more good news about our economy,” Obama said during an appearance at an Arlington firehouse. “Still, far too many Americans need a job or need a job that pays better than the one they have now. But the economy is growing stronger.”
The report forced his presidential rivals to adjust their rhetoric about the economy, which has played a leading role in the Republican debates. But they appeared ever ready to remind listeners that the unemployment rate remains elevated.
Exactly what lies ahead for the U.S. economy is far from clear. Even the more optimistic economists note that another downturn in Europe, or a spike in oil prices, or another debt showdown in Washington — or some other unexpected shock — could derail the nation’s unanticipated economic momentum.
But the Friday report depicted an economy that is gaining traction.
The number of jobs has been rising at a rate of 200,000 monthly, and those jobs are appearing in many parts of the economy, signaling a broad recovery. The growth was robust in the leisure and hospitality business, in the health-care industry and in manufacturing, which added 50,000 jobs, a higher monthly figure than at any time since 1998.
For the past few months, the stop-and-start economic recovery has shown tentative signs of unanticipated strength, and Friday’s report of another significant drop in the unemployment rate lent credibility to a bullish view, some economists said.
“This is a game changer,” Ian Shepherdson, chief U.S. economist at High Frequency Economics, said of Friday’s employment figures. “The payroll numbers validate, in the market’s eyes, what all the other data are saying.”
The nation’s economic forecasters, many of whom had predicted that the unemployment rate would remain stubbornly high this year, seemed to back off their gloomiest positions.
The Congressional Budget Office has predicted 8.9 percent unemployment for the year; the Federal Reserve has predicted between 8.2 percent and 8.5 percent for the year. Likewise, Moody’s Analytics had expected the unemployment rate to remain at 8.5 percent through the end of the year.
Moody’s Analytics, for one, is now reconsidering its predictions.“The collective psyche seems to be turning a bit more optimistic,” said Marisa Di Natale, the firm’s director of economic research. “We’re certainly going to revise our forecast.”