We keep hearing that Obama is in trouble, really, with such high unemployment he has to be. We are urged to believe that it doesn't matter that the GOP is Barnum & Bailey, we're told that Obama will struggle against any candidate if the unemployment rate is above 7.2% or so.
I don't really buy this. For one thing no President has been re-elected since WWII with an unemployment rate above this level, it's true. But note that's since WWII. FDR was reelected a bunch of times with a rate way above that. Why? Because the American people understood reality. There's a good argument that Obama can be re-elected even with an elevated level as this is the worst downturn since the Depression.
The GOP thought they had a winning strategy. While on the economic blogs we have arguments between Keynesians and Monetarists as to what is better monetary or fiscal stimulus, the GOP has resolutely opposed both even threatening Ben Bernanke and raising the bloody shirt of "treason."
While there are still plenty of caveats to apply today, the unemployment rate has now dropped to 8.3% the lowest since 2008-before Obama was in office for those who try to call this the "Obama recession."
"There were 234,000 nonfarm payrolls added in January, nearly 100,000 more than expected, and the unemployment rate continued to creep down to 8.3 percent from 8.5 percent. That follows the creation of a revised 203,000 payrolls in December and 157,000 in November."
The Republicans are desperately trying to spin this into bad news even declaring that this represents how many straight months of having over 8% unemployment. No matter how you want to spin it, the economy is improving. In this gain of 234.000 I personally am even in that number somewhere with my new security guard gig.
At this point the worst case scenario is where Europe drags us down to their level however the best case could be that we start to even drag them-though that would be a heavy lift.
"It feels like we're now closer to growth of 200,000 a month. This would suggest that unemployment through the end of the year should continue to decline," said Mark Zandi, chief economist at Moody's Economy.com. "It's not as strong as the numbers say, but I think it's real in terms of business engagement."
Zandi it should be remembered was the one who had declared during the spring of last year-when things were looking particularly bad; the Japanese earthquake had slowed growth and the US was in the middle of the debt ceiling farce-that the fundamentals of the US economy were the strongest he had seen in 15 years.
I agree caution is still required. But things are improving, there's no denying it. I think Obama could be re-elected with unemployment above 7.2%. However it's now not impossible that it could hit that level by November.
Good news for everyone in the country except the GOP.