Gone With the Trend
The government’s monthly jobs report for May has ignited a political firestorm in Washington and has become an issue of great concern for the Obama administration. The report showed that the economy only added 69,000 jobs last month, causing the national unemployment rate to increase from 8.1 percent to 8.2 percent. This increase primarily represents the previously employed reentering the workforce, since those who give up looking for work are not taken into account when calculating the unemployment rate. This may seem like a small change, but it is very much on the minds of politicians, particularly President Obama and presumptive GOP candidate Mitt Romney (after his win in the Texas primary, he has now unofficially clinched the nomination by winning more than 1,144 delegates). The election in November will be heavily influenced by the trajectory of the economic recovery: for months, the economy had been showing signs of growth, as job creation was healthy and the unemployment rate ticked down. But this recent report casts doubt on the strength of the recovery, and fears of an economic stall or even a double-dip recession are spreading. This bad news gives Romney’s campaign a boost by helping to validate his claim that the recovery is weak and needs to be taken in a new direction. If voters go to the polls in November and feel that the economy is stagnant or even getting worse, which unfortunately may be the case if Europe’s growing fiscal crisis infects the US, they are likely to vote against the party of the sitting president, much as they did in 2008.
Recent polling has produced a general consensus that Romney and Obama are in a dead heat, so the continued trajectory of jobs reports and economic figures will be extremely important in deciding who wins the election. The five monthly jobs reports that will be released before Election Day provide plenty of opportunities for the race to go either way. More reports as poor as this one would reinforce an image of an economy that is, while certainly not hemorrhaging jobs like it was during the recession, nonetheless nauseatingly stuck in the middle of a recovery, leaving many Americans desperate for employment. If this is the case come November, Romney will have a very good chance to unseat the president; even though some voters may not fully agree with his fiscal policies, they may choose to give them a try after what feels like four years of economic mediocrity and a “things could be worse” mentality on the president’s part. However, if May’s report turns out to be an anomaly, and the economy gets back on a growing trend, then voters will likely not buy Romney’s argument that recovery is too slow. It’s a bird-in-the-hand situation: if people know that the economy is improving under Obama, even if it is improving slowly, then they will probably give him another term rather than bring in someone about whom they are less secure. The European debt crisis will likely receive intense scrutiny in the coming months, particularly concerning Greece’s ability to save itself from bankruptcy and whether it decides to leave the eurozone. The future of global economic recovery is thick with uncertainty, as is the future of the American recovery and, by extension, the 2012 presidential election.