It's 2012 and that means it's time for two quadrennial events. The first will be the 2012 summer games in London, the second, though it's easy to have missed this, will be the upcoming presidential election in November. The Republican primary has been whittled down to a four man race between Mitt Romney, Newt Gingrich, Ron Paul, and Rick Santorum, and bashing the current President for the performance of the economy on his watch has been a common refrain.
However, with the January jobs report from the Department of Labor showing another 243,000 new jobs and an unemployment rate falling to 8.3 percent, it appears as though the economic recovery might be for real. “The economy’s above stall speed now,” said Gus Faucher, senior economist at PNC Bank in Pittsburgh. “It’s got that momentum going where you’re going to have job growth generating spending gains, generating job growth.”
If that's the case, is it coming just in time to salvage a second term for Barrack Obama? Only one President in history have been reelected with an unemployment rate over 6 percent, Ronald Reagan in 1984 when unemployment was 7.2 percent, but the Gipper was in the midst of a nearly 3 percent decline in that rate over 18 months.
Obama to Hope for Change in Economy?
The Republican candidates have been hammering on Obama about the current economy since the start of their campaigns, and the President seems to have been a target since November 5th, 2008. However, the question remains: can Obama win reelection if the economy continues its gains? Or, more to the point, how strong does the recovery have to be to secure a win?
While the economy alone won't decide the election, poll after poll seem to have established that the economy is the number one issue for a wide majority of voters. And while the promising jump in jobs numbers over the last few months appear to mean things could be turning around, the depth of the problem means that there's still a long way to go. What's more, three plus years of economic pain may be hard for voters to forget.
"Last week, we learned that the economy grew only 1.7 percent in 2011, the slowest growth in a non-recession year since the end of World War II," he said in response to the new economic numbers. "As a result, the percentage of Americans in the job market continues to decline and is now at a level not seen since the early 1980s. Nearly 24 million Americans remain unemployed, underemployed, or have just stopped looking for work. Long-term unemployment remains at record levels."
Romney and others are quick to point out that the 8.3 unemployment figure that's oft cited doesn't count the underemployed or those job-seekers so discouraged that they've given up looking for work. If included, those people increase the number to 15 percent. “At January’s rate of job gains—243,000—the nation wouldn’t return to full employment for another seven years,” Robert Reich, Berkeley professor and former U.S. Secretary of Labor under Bill Clinton, wrote in a blog post.
Improving Outlook May Help President
However, the improvement does seem to have voters taking notice regardless of its critics. Some polls earlier this week indicated that the President would win reelection against either of the two GOP candidates who seem most likely to win, winning 51 percent of the vote in a hypothetical match-up with Romney and 54 percent against Gingrich. What's more, Obama's job approval rating has risen to 50 percent.
There are serious headwinds on the horizon. One of the biggest lags on the economy remains the sagging housing market, which continues to be in rough shape despite the $26 billion settlement federal regulators made with five major banks Thursday. What's more, serious concerns about Europe remain. Even if the eurozone can get out of its immediate debt crisis, there remains the serious possibility that serious austerity measures throughout the continent will contribute to a recession there that could have serious effects on the American economy.
In the end, the American people will have until November to make their minds up about whether or not Obama deserves a second term, and many will make that decision without serious consideration of the state of the economy, but it does seem clear that Obama's political fates appear tied to the economic fates of us all.
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