It’s the number that drives Washington, and on Friday, offered some welcome wind at the back of President Obama.
The Bureau of Labor Statistics announced on the traditional first Friday of the month that the unemployment rate in November had dropped to 8.6 percent from 9.0, a statistical blip that translates to about 120,000 Americans who have new jobs.
One unfortunate caveat in otherwise good news is that joblessness hasn’t just gone down. Half of Friday’s drop was because of new jobs added, and the other half because about 315,000 people stopped looking for work, which means they’re still unemployed, just no longer counted in the labor force.
But does the optic of a lower number help Obama make his argument that his policies are working?
“The president can take a little comfort in these numbers, but if I were in his shoes I wouldn’t go too far out on that limb,” says Nariman Behravesh, chief economist with IHS Inc. “If the number drops because people are discouraged, that’s not a good sign.”
It’s also unlikely to numb any of the criticism coming from Republican presidential candidates, who in past months have dinged Obama for a 9-percent rate—and during August, creating zero net jobs. Frontrunner Mitt Romney was nonplussed by Friday’s news, pointing out that unemployment has been above 8 percent for 34 months, almost exactly the length of Obama’s presidency.
“The Obama administration may have come to accept such a high level of joblessness as the new normal. I will never accept it,” Romney said in a statement released by his campaign before the White House could even release its prepared remarks.
There’s reason to believe the depressed unemployment rate could still go right back up in the months ahead--specifically after the holiday spending binge, when campaign 2012 heats up. One is the continued reluctance of many companies to hire, and the other is the spiraling European debt crisis, which is entirely out of U.S. control but still holding substantial influence over American markets.
“This fragile growth now faces fierce headwinds, with austerity in Europe and Great Britain driving those economies into recession,” says Robert Borosage, director of the left-leaning advocacy group Campaign for America’s Future. “The financial crisis in Europe will impact zombie banks in the United States.”
The White House knows that one month’s numbers don’t necessarily make or break a political argument, especially considering that the BLS frequently revises data from past months to reflect economic dynamics that are hard to quickly measure.
Yet Alan Krueger, chair of the White House Council of Economic Advisers, dusted off on Friday what’s been a frequent administration refrain—and likely to be Obama’s best argument for reelection next year.
“Today’s employment report provides further evidence that the economy is continuing to heal from the worst economic downturn since the Great Depression,” Krueger said in a written statement. “But the pace of improvement is still not fast enough.”
Political translation: we’ve still got lots to do, but come on, give us some credit.