The drop in unemployment to 8.3 percent in January is the latest bit of positive economic news for President Obama and complicates the strategy of his likely Republican opponent, former Massachusetts governor Mitt Romney.
For months, Romney’s main argument against the president has been the high unemployment rate under Obama’s leadership. Romney has suggested his business record as founder of Bain Capital shows he can create jobs and the president, who spent little time in the private sector, does not have the necessary experience.
More than any of the other Republican candidates, Romney has emphasized his ability to turn around the American economy.
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But if the number of Americans who are jobless continues to go down and there are other signs of economic rebound, Romney could find the chief rationale for his candidacy undermined.
The job news also puts Romney in a complicated situation, as he must in some ways root for the jobless rate to go back up or not dip too low, as that would further threaten his route to the presidency. At the same time, he must of course avoid rhetoric that sounds like he is not enthusiastic about economic growth.
The alternative for Romney is to acknowledge the positive news, but say the economy would have rebounded even faster if he were president, a kind of counter-factual that is hard to convince voters of. (Obama has struggled with this problem for three years, as voters have largely not supported his argument the recession would have been even worse without the 2009 stimulus)
The GOP candidate took this approach on Friday, after the jobs’ numbers were released.
“We welcome the fact that jobs were created and unemployment declined,” Romney said in a statement. “Unfortunately, these numbers cannot hide the fact that President Obama’s policies have prevented a true economic recovery. We can do better. He added, “long-term unemployment remains at record levels.”
For the president, there are cautionary notes on what is generally positive news. The unemployment rate is based on people going out and seeking jobs and does not include people who have stopped looking for employment. This jobs report could result in the unemployment rate going up next month, as people who had given up finding a job now start more aggressively seeking work.
And even if the unemployment rate keeps dropping, it may not go below 7.2 percent, the jobless rate when the president took office. Romney may be able to argue unemployment did increase under in Obama’s tenure.
But Ronald Reagan won in 1984 when unemployment was still high, but declining at the end of his term. Obama aides have studied that model, and the president is employing that same kind of optimistic, “morning in America” style rhetoric.
“It is important not to read too much into any one monthly report,” said Alan Krueger, chairman of the Council of Economic Advisers at the White House. But he added, “Nevertheless, the trend in job market indicators over recent months is an encouraging sign.”
Follow Perry Bacon Jr. on Twitter at @perrybaconjr
