New Employment Report More Politics Than Economics?
President Barack Obama, reeling from a poor debate performance, won a valuable reprieve Friday with a reduced unemployment number in September that brought the jobless rate down to a level unseen since January 2009 when he took office.
The new threshold carries more political than economic weight. The Labor Department reported that employers added 114,000 jobs in September, slightly better than expected but still below levels needed to sustain a reduction in unemployment.
But the report held several good signs for Obama as he and rival Mitt Romney enter the final four weeks of the presidential campaign in an election dominated by the economy and high unemployment.
The economy created 86,000 more jobs in July and August than initially estimated, a sign of the volatility of the jobless reports and their unreliability as a snapshot of the economy.
The Labor Department also reported wage growth in September, evidence of more people looking for work.
Still, Romney cast the new reports as further sign of a weak economy under Obama.
"This is not what a real recovery looks like," he said in a statement, noting that the figures showed fewer jobs created in September than in August and, that if people who have dropped out of the labor force were counted, the unemployment rate would be closer to 11 percent.
Obama acknowleged that more jobs needed to be created.
"Today's news certainly is not an excuse to try to talk down the economy to score a few political points," Obama told a campaign rally. "It's a reminder that this country has come too far to turn back now."
Earlier, Labor Secretary Hilda Solis accused the GOP-controlled House of Representatives of blocking action.
"I would just say we still have a ways to go," she told CNBC. "We still have many people that are out of work, well below 12 million, and we still need to continue on the path that the president has taken us down. And this is in spite of the resistance on the part of members of Congress."
The new numbers come less than 36 hours after the economy dominated the first presidential debate of the general election, reinvigorating Romney and leaving Obama on the defensive.
After Friday's numbers there is only one more unemployment report left before the Nov. 6 election.
Jobs have been a central theme in this election. The words "job" and "jobs" were among the most frequently mentioned in Wednesday's debate in Denver, uttered at a rate of more than once every two minutes in a 90-minute showdown.
A recent Associated Press-GfK poll found that the vast majority of voters already have settled on a candidate, but 17 percent of likely voters are considered persuadable — either because they're undecided or showing soft support for Obama or Romney. Roughly 56 percent of persuadables approve of the way Obama is handling his job as president, but fewer, 47 percent, approve of his handling of the economy.
"The main effect of this particular number is going to be primarily political," said Bruce Bartlett, an economist in President George H.W. Bush's administration. "It gives Obama a talking point, something to get people's attention off his debate performance."
While employers are hiring, the pace has been far too slow to reduce unemployment in recent months. Still, while the slow recovery has been a drag on Obama's re-election hopes, the monthly reminders of joblessness have not markedly altered the trajectory of the presidential campaign.
For instance, August's weak hiring numbers were released just a day after Obama delivered his acceptance speech at the Democratic National Convention. Yet they didn't appear to interfere with Obama's post-convention bounce in public opinion polls or with perceptions that he would be as good as Romney at creating jobs.
The unemployment rate has fluctuated between 8.1 percent and 8.3 percent since January after being stuck at between 8.9 percent and 9.1 percent for 10 months in 2011. The new report gives Obama allies reason to rejoice if for no other reason than the rate dropped below the stubborn 8 percent mark that had become a political and psychological barrier. No president has been re-elected with unemployment above 8 percent since the Great Depression.
Romney has been inveighing against Obama as ineffective in job creation, noting time and again that the unemployment rate has been above 8 percent for 43 straight months. Speaking in Denver on Thursday morning, Romney said Obama would raise taxes on small businesses, "which will kill jobs."
"I instead want to keep taxes down on small business so we can create jobs," Romney added. "This is about good jobs for the American people."
At his own Denver rally Thursday, Obama countered that Romney offered the same economic remedies of the past. "We cannot afford to double down on the same top-down economic policies that got us into this mess. That is not a plan to create jobs."
Analysts and Obama advisers maintain that the unemployment number itself is less important than the trajectory, and Obama aides are quick to note that the past recession drove unemployment up to 10 percent in 2009 before it began to drop.
"As long as people are seeing improvement, at least some voters are going to say to themselves, `well, best not to switch horses in the middle of the stream,"' Bartlett said.
But the jobless numbers, the most attention-grabbing economic data point, also don't exist in a vacuum. Other indicators, taken together, present a mixed economic recovery that is trending positive.
Consumer confidence grew last month. Average rates on fixed mortgages fell to record lows for the second straight week and mortgage applications climbed 16.6 percent last week, according to the Mortgage Bankers Association. Still, underscoring the mixed picture, the Commerce Department said Thursday that factory orders fell 5.2 percent in August, the biggest drop in more than three years.
Last week, the Obama administration got some good news when the Labor Department reported that the economy added 386,000 more jobs than had previously been estimated in the 12 months ended in March. The revision officially put job creation under Obama's presidency in the black, with more jobs in the U.S. now than when he took office.