The market's reaction to the U.S. monthly jobs report has been desultory. And for good reason: The modest gain in U.S. nonfarm payrolls of 80,000 in June is less than the 100,000 median estimate in a Bloomberg News survey. Private employment, which excludes government jobs, increased by only 84,000, the weakest jump in 10 months.
The overall rate of unemployment remained steady at 8.2 percent. Hours and wages rose slightly, but for the third consecutive month, there were too few jobs. Wage earners continue to take it on the chin as the economic recovery slows.
So that means President Barack Obama's re-election is in serious trouble, right? Not necessarily. Unemployment figures offer important clues to the outcome of a presidential election; as many commentators have pointed out, only one president since World War II has been re-elected with a jobless rate above 7.2 percent. That president was Ronald Reagan, who won his second term in 1984 with unemployment at 7.2 percent, a rate that had fallen almost three percentage points over the previous 18 months.
This year, however, the overall jobless rate may be the wrong number on which to fixate. If you look just at the dozen swing states that could decide the Nov. 6 election, unemployment is much lower at 7.5 percent -- not far from Reagan's 7.2 percent benchmark. The numbers range from Nevada's high of 11.6 percent to New Hampshire's low of 5 percent. With four more months of' payroll reports to go, Obama could beat or match the lucky number.
Some political scientists say that the overall condition of the economy influences voters more than regional variations. It's also possible that the economy will continue to weaken and both the national and 12-state averages could look worse come Nov. 6. In which case, Obama could well lose to Mitt Romney, the likely Republican nominee.
If you narrow the lens even more to the four states that some political junkies insist are the only battlegrounds that truly matter -- Colorado, Iowa, New Hampshire and Virginia -- the average unemployment rate is surprisingly low at 6 percent. If you want to keep score at home, watch those states.
The 12 swing states and their unemployment rates are as of May; June figures for the states will be released by the U.S. Department of Labor in mid-July. The dozen states are Colorado, Florida, Iowa, Michigan, New Hampshire, Nevada, New Mexico, North Carolina, Ohio, Pennsylvania, Virginia and Wisconsin. Here are the state-by-state jobless figures.
Read more breaking commentary from Bloomberg View columnists and editors at the Ticker.