Great Topline Jobs Number, Still Big Problems For Democrats on the Economy
President Barack Obama spent nearly an hour yesterday extolling what the administration believes are the unseen virtues of the U.S. economy under his watch. Today he got a jobs number to underscore that point.
U.S. payrolls rose 248,000 in September — the median forecast of economists in a Bloomberg survey called for 215,000 — and the unemployment rate dropped under 6 percent for the first time since July 2008. On top of that, another 69,000 jobs were added to the July and August numbers due to revisions.
In other words, it was a big report and Democrats were quick to seize on the numbers.
Here's the thing on jobs numbers though (a historically unreliable and overemphasized piece of economic data, it should be noted): they have been on a positive trendline for awhile, with payrolls this year expanding at the fastest pace since 2009. And the numbers join the positive growth numbers, record stock market highs and companies looking at the lowest debt-to-earnings ratios in more than two decades. As has been the case for awhile, the topline numbers for the U.S. economy are, if not great, certainly good and, perhaps more importantly, significantly better than the rest of the world.
But that doesn't make up for the disconnect with many Americans on the economy — the same people who will have the opportunity to vote Obama's party out of control of the U.S. Senate in a little more than a month. Take a look at these jarring numbers from the piece my colleague Michelle Jamrisko did on Obama's Thursday economic speech at Northwestern University:
Five years since the June 2009 start of the economic recovery, middle-class incomes still haven’t returned to pre-recession levels. Annual median household income in July was still more than $2,600 lower than at the December 2007 start of the recession, according to Sentier Research, a consulting firm based in Annapolis, Maryland.
The economic rebound has been especially weak for key Democratic constituencies. Their enthusiasm is crucial in the November election because midterms typically draw fewer voters, making turnout of party loyalists especially important.
In the first five years of the recovery, median household income fell 4.6 percent for women living alone, 5.6 percent for Hispanics and 7.7 percent for blacks compared with a 3.1 percent drop for the country, according to Sentier.
The numbers for key constituencies don't look any better in the latest report. Economists are attributing the drop in the unemployment rate at least in part to a decline in labor force participation. That number — the measure of Americans employed or looking for a job as a share of the working-age population — decreased to 62.7 percent. That's the lowest since February 1978. Teen unemployment rose, as did the unemployment rate for those aged 20-24.
As Douglas Holtz-Eakin, the former head of the Congressional Budget Office and chief economic adviser to Senator John McCain's 2008 presidential campaign, put it: "The bottom line: the September report was mixed news."
"Optimists will spin the top-line numbers and the administration will tout them as well," Holtz-Eakin said. "But the underpinnings of the decline in unemployment and the absence of earnings growth are reasons to be cautious.
Obama said his speech yesterday wasn't political, but make no mistake, it was the opening salvo of his closing argument for the November midterm elections. Administration officials regularly bristle at complaints about the economy, pointing to all of those numbers above, and more, to show that in the last six years no other country has recovered from the financial crisis in a better, fuller way. But there is more to the economy than strong corporate earnings, strong topline numbers and good trendlines. There is a perception — in many cases, as shown above, backed up by hard numbers that make it a reality — that the U.S. economy isn't firing on all cylinders.
Obama actually identified the problem in his speech:
"But as Americans, we measure our success by something more than our GDP, or a jobs report. We measure it by whether our jobs provide meaningful work that give people a sense of purpose, and whether it allows folks to take care of their families. And too many families still work too many hours with too little to show for it. "
The White House says policies Obama has been pushing — an increase in the minimum wage, equal pay and paid maternity and paternity leave proposals, investments in research and infrastructure, and immigration reform — would have the cumulative effect of addressing many of the problems at the root of the disconnect. That's the campaign pitch Obama laid out yesterday.
"Make no mistake: These policies are on the ballot — every single one of them," Obama said.
According to just about every recent poll looking at how people view Obama's handling of the economy, the disconnect between those topline numbers and how Americans feel is very real. And that's a big problem for Democrats in November. No matter what the numbers say.