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Drop in jobless rate gives Obama some good news

Posted Oct. 05, 2012, at 6:14 p.m.

WASHINGTON — A drop in the unemployment rate to 7.8 percent, the lowest since President Barack Obama took office, gives the incumbent a new chance to talk about an improving economy and reset the campaign after a tepid debate performance against Republican Mitt Romney.

“It’s good news for Obama,” said Alan Abramowitz, a political scientist at Emory University in Atlanta. The drop in unemployment to under 8 percent is “symbolically important” to voters.

Unemployment rates had remained at 8 percent or higher since February 2009, the longest stretch since monthly jobless figures were first compiled in 1948. The 7.8 percent matches the January 2009 figure.

Alan Krueger, chairman of the White House Council of Economic Advisers, said the falling jobless rate shows “the economy is continuing to heal.”

“There’s a lot more work that needs to be done, but we are digging our way out of a very deep hole,” Krueger said in an interview with Bloomberg Television.

Romney, in a statement, said the portrait of America in the jobs report “is not what a real recovery looks like.”

“The results of President Obama’s failed policies are staggering — 23 million Americans struggling for work, nearly one in six living in poverty and 47 million people dependent on food stamps to feed themselves and their families,” he said.

Abramowitz said the stronger-than-expected jobs report probably will dominate news coverage for several days and blunt the momentum Romney picked up from favorable reviews of his performance in this week’s presidential debate.

Forecasters had expected the rate to rise to 8.2 percent from 8.1 percent in August, according to the median prediction of economists surveyed by Bloomberg News. The jobless rate had fluctuated between 8.1 percent and 8.3 percent since the beginning of the year.

Since last September, the unemployment rate has dropped 1.2 percentage points. The only election year in which unemployment dropped more during the same period was Ronald Reagan’s 1984 re- election, as far back as shown in monthly records that started in 1948.

The Labor Department’s survey of employers showed the economy added 114,000 jobs last month. Revisions to the two previous months’ data added another 86,000 jobs.

A separate survey of households, from which the unemployment rate is computed, showed an 873,000 increase in employment, the biggest since June 1983, excluding the annual Census population adjustments. About 582,000 Americans took part-time positions because of slack business conditions or those jobs were the only work they could find.

The political boost for Obama probably will be tempered because it comes so late in the campaign, when most voters’ opinions of the economy and candidates are entrenched, Abramowitz said. He created a forecasting model based on economic indicators and poll data that has predicted the popular vote winner in the past six presidential elections.

Abramowitz’s “Time For Change” model forecasts a 67 percent probability Obama will be re-elected and projects a victory margin of 1.2 percentage points, based on data before release of the employment report Friday.

Romney has blamed Obama’s stewardship of the economy for persistent high joblessness as the nation recovers from the worst recession since the Great Depression. Obama has emphasized progress on the economy and pleaded for more time for his policies to work. Romney’s economic approach favors the wealthy at the expense of middle-income families, Obama says.

No president has won re-election since World War II with an Election Day unemployment rate higher than 7.2 percent, the jobless rate when Reagan won his second term. Still, the trajectory of the economy historically has exerted the greatest influence on voters.

Obama has maintained a lead in polls against Romney. The incumbent Democrat was ahead of the Republican challenger 49 percent to 43 percent among likely voters in a Bloomberg National Poll conducted Sept. 21-24.

Like Reagan, Obama points to a turnaround of the declining economy he inherited from his predecessor.

Consumer confidence has grown recently as home values improve, stocks rise and gas prices stabilize. The Bloomberg Consumer Comfort Index climbed in the week ending Sept. 30 for the sixth straight week, the longest such stretch since early 2006.

The better job opportunities that the economic recovery has offered to more educated workers also has benefited Obama, because of the voter coalition of minorities and college- educated whites from which he draws the most support.

Unemployment among whites with bachelor’s degrees was 3.7 percent in September, less than half the national average. Among whites with some college education or with an associate degree from a community college, the jobless rate was 6.3 percent, down from 7.8 percent a year earlier and from 8.8 percent two years ago.

“It’s kind of overlooked in the larger numbers, and it explains a lot,” said Steven Jarding, a professor at Harvard University’s Kennedy School of Government and a former Democratic political consultant.

Obama’s support among blacks and Hispanics is based more on issues such as civil rights and immigration, while the jobs situation is more salient to many of Obama’s white supporters.

Obama led Romney 49 percent to 45 percent among college-educated whites in the Bloomberg poll of likely voters. Support for Obama dropped to 42 percent among whites with some college education and to 37 percent among whites with a high school education or less.

Voters with at least some college education “haven’t necessarily prospered but they’re doing OK,” Jarding said. “Romney may be the one that looks like the bigger risk to them.”

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