Terribly Lackluster

For the third month in a row, job growth has been lackluster. In June, the number of new net jobs came in at 80,000—slightly below the 90,000 to 100,000 expected. Likewise, revisions for previous months were a wash—April’s numbers were revised from 77,000 to 68,000, and May's were revised from 69,000 to 77,000. There simply isn’t much news in this jobs report, which is another way of saying that our sluggish economic growth is grinding to a halt.

Millions of American workers are stuck in continued stagnation, and the odds for relief are low. Republicans in Congress have no interest in providing additional fiscal stimulus, and the Federal Reserve is unmoved by widespread economic misery—if anything, it sees high unemployment as the necessary cost of low inflation.

Politically, this obviously isn’t good for President Barack Obama’s re-election chances, and it's a godsend for Mitt Romney, who has been struggling against a headwind generated by the Supreme Court’s ruling on the Affordable Care Act. That said, I would exercise caution before making a declaration about Obama’s chances in November. The overall level of unemployment is less important than the trend—if the economy is growing, and voters feel that things will get better, then Obama is in relatively good shape.

What’s more, it’s important to recognize that voters already know if they have jobs or not—the monthly jobs report is important because it sets expectations and determines media coverage. If Obama’s approval rating declines over the next week, it will have more to do with poor headlines than it will with the jobs report itself. Underlying conditions are important, but their political effect will play out over a longer time horizon.

Finally, there’s the possibility that President Obama has become politically resistant to stagnant job growth. Public expectations are low, and opinions of Obama are mostly set. Absent a dramatic change in economic conditions in either direction, there’s a fair chance the public will remain stable in its assessment of Obama—divided on his tenure but still open to giving him a second term.