It may not be as much fun to talk about as Etch-a-Sketch machines or Rush Limbaugh. But nothing will have a bigger impact on the November election than the economic situation. On Morning Joe Monday, Steven Rattner joined the gang to help explain what March’s disappointing jobs numbers mean both for the economy and the presidential race
Employers added 120,000 jobs last month – a drop-off from the last three months, each of which had seen gains of at least 200,000. Why the slowdown? One major reason, explained Rattner — a financier who masterminded the government’s auto industry bailout — is the unseasonably mild winter weather. That got people out of the house to do more shopping than usual in January and February, meaning businesses ramped up retail hiring earlier than in most years. Other analysts have said the good weather had a similar impact on the construction industry.
So what’s the longer-term pattern, and how are things likely to look by November? “Over the last 6 months, we’ve created 188,000 jobs a month,” said Rattner. “Over the last 12 months we’ve created 158000 jobs a month. If you take that as a kind of bracket of reasonable outcomes, we’re looking at about 7.8 or 7.9 percent unemployment on Election Day” – down from the current 8.4 rate.
No president in modern times has been re-elected when unemployment has been over 7.2 percent, which is where it was when President Reagan won four more years in 1984. That sounds like good news for Mitt Romney. But most experts think the direction in which the rate is trending is just as important to voters as the baseline number, since it affects people’s sense of whether things are moving in the right direction. On that score, President Obama will have a better case to make.
Still, there’s more to voters’ perceptions of the economy than the unemployment rate. Rattner noted that wage growth, which plummeted during the downturn, has yet to significantly recover. That’s left even many Americans who do hold jobs feeling pessimistic and insecure. And, worryingly for the White House, analysts say it’s not something that’s likely to turn around any time soon.
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