One thing is becoming increasingly clear: The employment picture will be a lot sunnier for Barack Obama by the time November rolls in. According to the Labor Department Thursday, the number of people seeking unemployment benefits fell to a four-year low last week. Gallup’s Daily tracking polls show the unemployment rate declining from 9.1 percent in February to 8.4 percent in March.
Weekly unemployment applications were at the fewest since April 2008. The four-week average was also the lowest in four years. Not only did more Americans find more work, but fewer were forced to take part-time work when they were seeking a full-time job. There are many indications that the economy might finally be gaining momentum – though there is still a long way to go.
No doubt, conservatives will find it somewhat frustrating to hear that Barack Obama, who has presided over dreadful job numbers his entire first term, will benefit politically from an economy that they believe is finally breaking free of the administration’s anti-growth policies. Needless to say, it would be astoundingly dumb politics to behave as if all this wasn’t great news.
It would not be bad politics, however, to put it all in context. When selling the debt-exploding stimulus plan, the administration famously made the case that the unemployment rate would stay below 8 percent and that would it drop to 6 percent by now. Let’s also remember that the stimulus’ mission was retroactively reassigned from creating jobs to “saving” jobs, not to mention an array of other things that had nothing to do with growth.
Nor would it be terrible politics to point out, as Edward Lazear, professor at Stanford University’s Graduate School of Business, recently did in the Wall Street Journal, that since the recession ended, the U.S. economy has grown at rate of 2.4 percent – a percentage point below average long-term growth — making this the worst recovery in history.
Typically a recession is defined as a decline in GDP for two or more consecutive quarters, but for the average American it never went away. Since the current “recovery” began in second half of 2009 we have seen a 3 percent GDP growth in 2010 followed by a drop to 1.7 percent in 2011. Forecasters claims that this year’s growth will be around 2 percent.
The most obvious comparison we can make regarding this recovery is the Reagan recovery – which many argue started in just as deep a (cliché-dug) “ditch.” Though historical analogies are fraught with a million inconvenient details, the fact is that one of these recoveries was driven by free-market policies and the other was, most certainly, not. One was an explosion and the other a stagnation. Compare:
So, the news is good, yes. Perhaps that’s because our economic expectations have been eroded to the point where 8 percent unemployment can be amazing news. No doubt, it’s tough to put economic news into context, especially when such news is more about lives than numbers, but that’s exactly what Republicans will have to do.
Yes, “it could have been a lot worse” but it also “could have been a whole lot better.”
UPDATE: A commenter points out that the traditional unemployment percentage is overvalued or misleading because it does not consider all the people who have dropped out of the job market. I agree. I should have mentioned it in the post. The labor force participation rate has been dramatically falling since the recession began. Still, that doesn’t mean there aren’t promising signs. The 2012 GOP presidential nominee may have more political ammunition than he knows what to do with, but dismissing any positive momentum would only make him look like he was rooting for more failure. I think that would be a mistake.