With higher-than-expected job creation in July, President Obama avoided a major blow in Friday’s unemployment report. But the rise in the jobless rate to 8.3 percent, up from 8.2 percent, mitigated the positive news – and handed campaign fodder to Republican challenger Mitt Romney.
Voters focus on the unemployment rate more than any other economic indicator, and the slight uptick feeds the narrative that the tepid economic recovery is losing altitude – a drag on Mr. Obama’s reelection prospects three months before Election Day.
Polls show the public still assigns much of the blame for the nation’s economic woes to former President George W. Bush, who left office in January 2009 amid an economic crisis. But with each passing month, Obama owns the economy, and he could pay the price for that in November. No president has been reelected with unemployment over 7.4 percent since the Great Depression.
“The job creation number is a little positive news that President Obama can maybe boast about,” says Julian Zelizer, a professor of history and public affairs at Princeton University in New Jersey. “But when the unemployment rate goes up, that’s the headline.”
Even with unemployment at or above 8 percent for 42 consecutive months, Obama has held onto a slight advantage against Mr. Romney. The Real Clear Politics average of major polls show Obama leading by 2.7 percent points nationally and ahead by a higher margin in key swing states.
The Department of Labor’s employment report for July showed overall growth of 163,000 jobs in the nonfarm private-sector. Analysts had predicted growth of fewer than 100,000 jobs.
“That keeps the president in the ballgame” for reelection, says Dante Scala, a political scientist at the University of New Hampshire, Durham. “If the jobs numbers had come in below 100,000, I think voters – who are already in a bad mood – would have fairly quickly thrown in the towel on the president.”
Both Obama and Romney addressed the employment report Friday. In remarks aimed at pressuring Congress to extend tax cuts for the middle class, the president touted the job-creation number.
“We've now created 4.5 million new jobs over the last 29 months and 1.1 million new jobs so far this year,” Obama said. “Those are our neighbors and family members finding work and the security that comes with work. But let's acknowledge, we've still got too many folks out there who are looking for work.”
Mr. Romney called the rise in unemployment a blow to the middle class, and touted a five-point plan he released Thursday that he says will help the middle class.
The jobs report is “another hammer blow to the struggling middle-class families of America because the president has not had policies that put American families back to work,” Romney said at an event in North Las Vegas. “I do. I'll put them in place and get America working again.”
Romney promised to create 12 million new jobs in his first term. His plan aims to make the nation energy independent, improve schools, increase trade, help small businesses through lower taxes and regulation, and address the federal budget deficit.
The Obama campaign says the Romney plan cuts taxes for the wealthy at the expense of the middle class.
Romney advisers say that as voters get to know the former Massachusetts governor better, their comfort level with him will grow. Voters will start paying closer attention to the race with the conventions in late August and early September, then the debates in October.
Analysts expect the race to remain tight all the way to the end, barring some major unforeseen event.
“We’re in a gray zone, where the election could be decided on the margin,” says Mr. Scala. “It could come down to who has the better campaign.”