The June jobs report: What it means for you
That about sums it up.
Friday’s middling jobs report doesn’t tell us much that’s new. Instead it reminded us of a fundamental truth about this election; President Obama’s reelection chances largely hinge on the economy and unemployment.
The president previously enjoyed a month of good headlines, from his popular move to halt deportations for DREAMers to the Supreme Court’s decision to uphold his healthcare law. The fact that most of the political chatter on Friday is about how the unemployment rate (the most influential economic indicator) could damage Obama’s chances of reelection is a sign of how quickly the conversation can shift in politics.
The alarming fact for the president is that the trend of a steady decline in the unemployment rate that played out during the fall and winter has flattened out, as ABC’s Chris Good points out. And with only three jobs reports left until the November election, Obama will be hard pressed to present evidence to voters that the employment situation is steadily improving.
If voters sense that the recovery is sluggish — or that there is no real recovery at all — that could give Republican Mitt Romney a big opening to make Obama a one-term president. No president has been elected when unemployment is above eight percent since the Great Depression and Romney has constantly driven home the message that Obama has damaged the economy and that he is the one to fix it.
It’s nearly been a singular message for the former Massachusetts governor. For example, when Romney was put on the defensive about immigration early last month, he’s quickly pivoted to turn the conversation into one about jobs and the economy (though he did address the topic in a speech to NALEO, he would generally prefer not talk about it).
Obama, for his part, has argued that Romney’s policies would benefit the wealthy and shove the economy back into a tailspin. The president says that he should be given a second term to continue to implement policies that benefit the middle-class.
The economy has appeared to keep the race close for Romney; the president has slim leads in three key battleground states (Ohio, Pennsylvania, and Florida) in a Quinnipiac University poll taken last week, and voters there are basically divided over who is best to handle the economy. Friday’s numbers aren’t likely to give Obama any kind of boost there.
The lingering question, though, has been whether Obama could re-energize his coalition that propelled him to victory in 2008, a big chunk of which is made up of minority voters. The theory goes that Obama could use his advantage among the growing share of the electorate that is not white to limit the political damage wrought by the weak economic recovery.
That’s because minority voters, including nearly two-thirds of Latinos, still trust Obama to handle the economy, while the overall population is becoming split.
Despite the fact that Latino unemployment remains stuck at 11 percent, nearly three percent more than the national average, Romney has been unable to convince a significant amount of Latinos to back him; his support among Latino voters has continued to hover in the mid-20 percent range in most opinion polls even has the recovery in the labor market has slowed down.
Over 62 percent of Latinos approve of the president’s handling of the economy in an NBC News/Wall Street Journal/Telemundo poll released in late June, nearly matching Obama’s overall support among Latinos.
And Obama appeared to fire up his Latino supporters last month when he announced his decision to stop deporting young undocumented immigrants who are seeking a college education or military service. Around half of Latinos in five battleground states said that made them more enthusiatic about backing the president, according to a Latino Decisions poll.
But the question remains whether that bump will last.
If the labor market remains stuck in neutral between now and the election, it’s very possible that could impede the president’s efforts to convince Latinos and other base groups to show up on Election Day.
The NBC poll shows that Latinos have showed a relative lack of interest in this year’s election compared to other groups that are less supportive of Obama, and that’s even after the president announced his decision on deportations.
NBC’s Domenico Montanaro writes:
Two-thirds – 66 percent – of Latinos put themselves in this high-interest category. Last month, it was 68 percent. That’s much lower than the average of 80 percent in this poll for all adults.
It’s particularly problematic for Obama’s re-election chances, considering some of the highest-interest groups are ones likely to vote for Romney – Tea Party supporters (89 percent), McCain 2008 voters (88 percent), conservatives (84 percent), those 65 and older (83 percent), Republicans (83 percent), and whites (81 percent).
The bottom line is this: The state of the economy is going to make this election very close. In order to win a second term, Obama will have to convince his core supporters that despite the fact “it’s still tough out there,” as he put it today, it’s still worth showing up to vote in November.
A closer look at the numbers: the great re-balancing continues
The latest numbers confirm, once again, that we are in for a long haul with this recovery. June looked a lot like May, there is not too much different that stands out. The economic recovery, which shifted into low gear in March, continues to proceed at a sluggish pace. While we are doing better than a year ago—when the unemployment rate was 9.1 percent — the economy is barely creating enough new jobs to keep up with the new people who are entering the workforce. The unemployment rate for Latinos at 11 percent remains particularly high. There was little growth in construction, leisure, and hospitality, and retail trade, sectors which are heavily dependent on Latino labor.
Employment in manufacturing increased by 11,000 in June but this is down from an average of 41,000 per month during January-March.
Fast going up, slow coming down. Source: US Bureau of Labor Statistics
Companies are hiring at a very gradual pace. The two main reasons are uncertainty and the re-balancing of family finances. Companies are still worried about what the future will bring. It is unclear what will happen to Europe no one wants to have too many employees if another crisis hits. Consumers are spending their time and money rebuilding their personal balance sheets. They are paying down debt and saving rather than buying new homes, cars and refrigerators. This re-balancing after a debt crisis normally takes a long time.
The slow recovery is expected to continue during the rest of 2012, complicating the reelection plans of President Obama.