January’s jobs report is welcome news for the president.
The unemployment rate dropped 0.2 percentage points to 8.3 percent; 243,000 new nonfarm jobs were created in the past month.
More important than the numbers is the trend: It’s the seventh-straight month of job growth over 100,000, as well as a marked increase from December when the economy added 200,000 jobs. It’s also the fifth straight month in which the unemployment rate dropped, and the lowest rate in nearly three years.
Below the top-line numbers were other encouraging signs: Hiring was widespread across many high-paying industries, pay increased, and 2011 numbers were revised upward.
If that trend continues, Obama’s reelection prospects will continue to strengthen.
This chart from the New York Times’ Nate Silver shows how, with some outliers, job growth correlates with incumbent success:
He estimated that if former Massachusetts governor Mitt Romney — a fairly generic Republican — is the GOP nominee, Obama will need to see growth of 150,000 jobs a month to win.
No president in recent history has been reelected with unemployment above 8 percent, and analysts suggest it would take growth of between 167,000 and 260,000 jobs a month to get there by November.
Just because unemployment is decreasing right now doesn’t mean it will continue to do so for the next eight months.
And if discouraged Americans who dropped out of the workforce start looking for jobs again, it will nudge the unemployment rate up. Republicans, in the wake of past positive jobs news, have highlighted those who are no longer considered “unemployed” because they have stopped looking for work.
But the trend must be encouraging for the embattled incumbent.
In his State of the Union late last month, President Obama took a gamble — saying “America is back,” he presented a country decisively on the right track. For now, it seems it was a good bet.