Charles Dharapak/ASSOCIATED PRESS
President Obama at a window manufacturing plant in Maryland, Friday, Jan. 7, 2011.
President Obama at a window manufacturing plant in Maryland, Friday, Jan. 7, 2011. Charles Dharapak/ASSOCIATED PRESS
To put into political perspective for President Obama's re-election chances Friday's jobs report, in which the Labor Department reported a lower-than-forecast 103,000 jobs were created in December, it helps to combine some things.
Testifying before the Senate Budget Committee Friday morning, Federal Reserve Ben Bernanke reminded senators that almost 8-1/2 million jobs were lost in 2008 and 2009 during the recession.
... Private payrolls expanded at an average of only about 100,000 per month in 2010— a pace barely enough to accommodate the normal increase in the labor force and, therefore, insufficient to materially reduce the unemployment rate.
The 103,000 overall payroll jobs (113,000 private sector jobs were created) in December clearly just continued that trend of what many are calling a jobless recovery.
White House Council of Economic Advisors Chair Austan Goolsbee tried to put as good a face as possible on the December numbers. He wrote in a blog post:
Today’s employment report shows that private sector payrolls increased by 113,000 in December, capping 12 consecutive months of growth that added 1.3 million private sector jobs to the economy during 2010, the strongest private sector job growth since 2006.
But, again, the 1.3 million jobs pales against the magnitude of the 2008-2009 job losses which Goolsbee acknowledged.
Even though the unemployment rate fell sharply in December, it is still unacceptably high and we need robust employment growth in order to recover from the deep job losses that began over two years ago. The overall trajectory of the economy has improved dramatically since then, but there will surely continue to be bumps in the road ahead. The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.
Back to Bernanke. Another thing he reminded senators of in his Friday testimony is that the recovery of jobs is likely to be long and painful.
The projections submitted by Federal Open Market Committee (FOMC) participants in November showed that, notwithstanding forecasts of increased growth in 2011 and 2012, most participants expected the unemployment rate to be close to 8 percent two years from now. At this rate of improvement, it could take four to five more years for the job market to normalize fully.
So some of the best economic forecasting suggests the president will have the signal challenge of running for re-election against the backdrop of a historically high jobless rate.
As Jonathan Last reported in the the Weekly Standard in November, there's not much precedence for modern presidents running for re-election with such high unemployment rates:
The first is that no president since FDR has run for reelection with the unemployment rate above 8 percent. And the outlook for 2012 is grim. The White House Office of Management and Budget projects 8.1 percent unemployment in 2012. So does the Congressional Budget Office. And those are the rosy scenarios. Other forecasters, from Goldman Sachs to the IMF, predict that the unemployment rate will be 10 percent in 2011 and only somewhat lower in 2012.
All of this explains why it's likely President Obama and his new White House team will try to move heaven and earth to persuade voters their policies are creating jobs, albeit slowly for now.
And where they can, you can expect administration officials will seek to pin blame for the jobless rate not falling faster on the policies of the now Republican-controlled House and Senate Republicans.