With meager jobs growth, 'time running out' for Obama (+video)
The 2012 presidential election may hang on voters' perceptions about the economy, and Friday's report that just 115,000 jobs were created in April won't do much to help Obama. What's the outlook for the months ahead?
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The latest proof of that slower pace came Friday, when the government reported that the economy added only 115,000 jobs in April, down from a gain of 154,000 in March and an average of 252,000 per month between December and February. The widely watched unemployment rate came in at 8.1 percent, down from 8.2 percent in March.
It's entirely possible that the outcome of the presidential election will hang on the answer to this question: Will the economy and job growth reaccelerate between now and November, or will they remain in a low gear?
If the economic news is bad now for President Obama, whose stewardship of the economy is being disparaged by Republicans, the months ahead may be less discouraging: Economists and labor experts expect to see some modest improvement. Even so, job growth is unlikely to be enough to make many Americans feel good about their economic prospects.
“I think growth is going to be moderate for the rest of the year, and this will not be a plus for President Obama running for reelection,” says Sung Won Sohn, a professor of economics at California State University, Channel Islands.
Economist Linda Hooks at Washington and Lee University, in Lexington, Va., does not expect any “clear improvement” in the next two or three months. By the middle of the summer, she says, the economy's performance might be a little stronger. “The numbers will improve, but time is running out for Obama,” says Ms. Hooks.
The timing of any improvement could be critical for the president and, by extension, for his challenger, Mitt Romney. Americans start to make their own assessments about the economy about six months before the general election. Do they know people who are unemployed and can’t get a job? Do they feel confident they won’t get laid off? Are they feeling good enough about the economy to buy a new car or to remodel their home?
So far, those assessments are not positive for Mr. Obama. In polling, Quinnipiac University has found that 70 percent of the people surveyed say the economy still feels as if it’s in a recession.
“A small majority in recent polls said the economy is beginning to recover, but that has leveled off,” says Peter Brown, assistant director of the Quinnipiac University Polling Institute in Hamden, Conn.
Optimism about the economy had picked up early last winter when companies started to hire in more significant numbers. But some economists say this was because the weather in much of the country was warmer, allowing construction crews to begin projects and inspiring people to shop for new cars. Now, the economy is merely “decelerating” from that growth spurt, says John Canally, chief economist at LPL Financial in Boston.
In the months ahead, he expects the economy to create 175,000 to 200,000 jobs a month. This would be considered moderate growth – enough to provide jobs for people entering the workforce each month.