Unemployment Up to 8.2%, How Will it Impact Obama and Romney?
Ruh-roh, unemployment is ticking up again.
The nation's monthly jobless rate -- disclosed by the Bureau of Labor Statistics (BLS) the first Friday of every month -- is this 2012's dominant economic barometer ... and also the fuel to the political fire in an election year. This report is a baseline from which to gauge the political fortunes of President Obama and Republican rival Mitt Romney in an election that rides on the pace of a post-Great Recession recovery.
The Friday numbers, then, will work in Romney's favor. The unemployment rate rose slightly to 8.2%, as the U.S. economy gained only 69,000 jobs in May. As the first rise in the jobless rate in almost a year, the numbers reflect growing concerns of a global slowdown, especially stemming from the on-going euro zone.
Friday's number will be the first since Romney clinched the Republican presidential nomination. It also comes as Obama heads for Minnesota to push his proposal to expand job opportunities for veterans and to raise money for his campaign. In the meantime, the world anxiously awaits the impact of the European debt crisis, which could stall the recovery in the U.S. ... will Greece default and be kicked from the euro zone?
Economists were expecting the report to show that employers added 158,000 jobs but that the unemployment rate did not change from April's 8.1%. No president since the Great Depression has sought re-election with unemployment as high as that, and past incumbents have lost when the unemployment rate was on the rise.
Romney wants this presidential election to be a referendum on Obama's term in office. Obama wants it to be a choice between two distinct visions for the country.
The economy is central to each candidate's argument. While imprecise and a typically lagging indicator of economic performance, the unemployment number is nevertheless an undeniable marker of the human cost of a weak economy.
Obama is counting on an unemployment trajectory that has fallen from a high of 10% in October 2009 to 8.1% last month. The president likes to point to the 3.8 million jobs created since he became president, though 12.5 million remain unemployed. He highlights the resurgence of the auto industry following government bailouts of Chrysler and General Motors. And his campaign has mounted a step-by-step assault on Romney's economic record, from his days as a venture capitalist to his tenure as Massachusetts governor from 2003-2007.
Some take-aways from Monday's BLS report:
- Stock futures tumbled ahead of the May jobs report. Futures for the Dow Jones Industrial Average dropped by 100 points to 12,283, for the S&P 500 fell by 26.1 points to 1283, and for the Nasdaq 100 lowered by 47 points to 2477.
- BLS said the unemployment rate rose to 8.2% as the U.S. economy gained only 69,000 jobs in May. As the first rise in the jobless rate in almost a year, the numbers reflect growing concerns of a global slowdown.
- In the swing states that will likely decide the election, current economic conditions favor Obama, as unemployment in battlegrounds like Ohio will be relatively lower than the national average come November, according to Moody’s Analytics.
- The Dow Jones sinks another 100 points in minutes of the jobs report release, which was worse than what economists had expected.
- Romney calls the report "devastating news" and an indication that Obama's economic policies have failed. House Speaker John Boehner (R-Ohio) says that "high unemployment and a weak economy" are "the sad new normal for families and small businesses," adding that the stimulus and 'spending binge' have failed to bring down unemployment as the administration had expected.
-Euro zone unemployment rises to a record 11 percent in March and April.
How will this new jobs data impact the 2012 elections?