President Obama’s re-election prospects are getting a boost from the plunging unemployment rate and the pickup in the economy and financial markets this year, economic and political analysts say.
The economic improvement since the middle of last year has been marked, with unemployment falling from more than 9 percent to 8.3 percent and economic growth rising from less than 1 percent to healthy annual rates closer to 3 percent. All this prompted a solid rally in stocks that, by the end of last month, had pushed the Dow Jones industrial average to more than 13,000 for the first time since 2008.
While threats remain and all sides agree that the economy still has far to go to recover all the ground lost during the Great Recession, the unexpected and sometimes startling gains bode well for an incumbent coming so close to the election.
Especially helpful to Mr. Obama was evidence last month that, thanks to an acceleration of job growth, the lower jobless rate held up despite a surge of nearly a half-million new job seekers into the market looking for work.
“More jobs are popping up here, there and almost everywhere,” said Sung Won Sohn, an economics professor at California State University Channel Islands. “President Obama, facing a tough election this year, is smiling.”
Behind the fall in unemployment was a significant pickup in job growth in the past three months to nearly a quarter-million new jobs a month. That exceeds the average growth rate during the 2000s expansion and is strong enough to keep drawing down the unemployment rate if such growth continues this year. Some economists are predicting unemployment will fall to 8 percent or below before the election.
“To be sure, it is not a home run,” Mr. Sohn said of the monthly job totals, but rather the economy is hitting “solid singles” that are adding up in a significant way. “Employment gains are feeding upon itself, pointing to a durable recovery,” he said.
Source: Washington Times | Patrice Hill