For this month’s jobs report, don’t pay attention to the top-line number. Yes, unemployment increased to 7.9 percent, but that’s because the economy is creating more jobs, and more people are looking for work. Not only did the economy create 171,000 new jobs—beating expectations by a significant amount—but labor-force participation is up, and the Bureau of Labor Statistics added 50,000 more jobs to the total for August (bringing it up to 192,000) and 34,000 to the total for September (bringing it up to 148,000).
If this were unusually good—250,000 new jobs, for instance—or unusually bad, then it could have a significant effect on the presidential race. As it stands, it’s just solid, and it won’t bend the needle in one direction or the other. President Obama can cite it as evidence that the economy is moving forward and we need to continue on the current path; Mitt Romney will hammer it as an example of the president’s “failed leadership.” In fact, right on time, that’s already happened; here’s a paragraph from Romney’s post-report press release:
Today’s increase in the unemployment rate is a sad reminder that the economy is at a virtual standstill. The jobless rate is higher than it was when President Obama took office, and there are still 23 million Americans struggling for work. On Tuesday, America will make a choice between stagnation and prosperity. For four years, President Obama’s policies have crushed America’s middle class.
So much of this has been challenged or contextualized by reporters, fact-checkers, and researchers. When Obama took office, the economy was collapsing around us, at a rate we could hardly fathom: In the final quarter of 2008, gross domestic product dropped by an annualized rate of 8.9 percent, and in the first quarter of 2009, it went down another 6.6 percent. By the time Obama was sworn in, the economy had already lost more than 3 million jobs. Three million more were gone by the time the stimulus package took effect in the summer of 2009. Romney’s rhetoric notwithstanding, it’s the stimulus that halted the damage and gave the U.S. economy a platform from which to grow.
The Obama administration has offered other, similar packages to generate job growth—the American Jobs Act, which would have produced upwards of 2 million new jobs, stands as the most prominent—but they were blocked by congressional Republicans, who maintain that the only way to grow the economy is by cutting spending and balancing the budget. That's the approach—called austerity—that has caused disaster in the United Kingdom, Spain, Italy, and Greece.
Today’s jobs report may not mean much for next Tuesday, but it is tremendously significant for the next four years. The steady increase in job creation and labor-force participation is a sign that the recovery has wings; as long as we don’t do anything to contract the economy—abrupt tax increases or dramatic cuts to spending—we should see gradual improvement. And if we do something to generate more demand in the economy—aid to states for hiring public employees, infrastructure spending—the recovery will build even more momentum.
Regardless of what he does in office, the winner of the presidential election will be able to take credit for this growth. Indeed, with his promise to create 12 million jobs, Mitt Romney has all but gone that route already; that 12-million number is the projection for job creation over the next four years, regardless of policy.
An economic recovery is a tremendous thing to have on a political resume—it’s what gave Ronald Reagan and Bill Clinton their landslide victories for reelection. If Obama is reelected, he’ll be able to take credit for his recovery, and build support for a broader Democratic agenda. If Romney wins, then—after four years of standing against recovery efforts—Republicans will have a chance to claim credit for economic growth. And with the wind of public opinion behind them, they’ll be well-placed to expand their House majority, build a new one in the Senate, and implement the whole of their radical, anti-government agenda.