In what’s likely to be a boost to President Obama’s chances of winning a second term, nonfarm payroll employment jumped by 243,000 last month as the unemployment rate fell to its lowest level since February of 2009.
But in a speech Friday morning to firefighters in Arlington, Virginia, Obama sounded a note of caution: “These numbers will go up and down in the coming months, and there are still far too many Americans who need a job or need a job that pays better than the one they have now, but the economy is growing stronger,” he said.
“The recovery is speeding up,” he said, and to keep it going, he argued, Congress must pass a package that would extend the payroll tax cut and continue unemployment benefits.
The number of unemployed persons declined last month to 12.8 million; when Obama took office in 2009 there were 11.6 million Americans who unemployed.
Speaking in Arlington, Va., President Obama urged Congress to keep the recovery going by extending the payroll tax cut, and to pass his veterans' employment plan.
In one negative piece of news, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed from December at 5.5 million.
And the total number of Americans employed in still 5.6 million below where it was at the start of 2008.
But for Obama an 8.3 percent unemployment rate is, of course, preferable to where it was at its peak during his presidency, 10 percent in October of 2009.
Since 1948, of presidents who have won a second term, Ronald Reagan in 1984 faced the highest unemployment rate in the month before Election Day: 7.4 percent. But when voters went to the polls in 1984, the jobless rate had been falling for months from its 10.8 percent peak in late 1982, and the improving trend had boosted national morale.
The political reaction to Friday’s employment data split along predicable lines: Republicans arguing that, as House Speaker John Boehner said, “Our unemployment rate is still far too high. Our economy still isn't creating jobs the way it should be,” but Democrats cheering the encouraging signs of economic revival.
Boehner argued that, “We can’t be satisfied with an unemployment rate mired above eight percent for years on end; we must do better. President Obama should call on Senate Democrats to take immediate action on our bipartisan jobs bills,” such as one to ease regulatory and tax burdens on small business owners.
In a statement, Republican presidential contender Mitt Romney said, “We welcome the fact that jobs were created and unemployment declined. Unfortunately, these numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery. We can do better.”
He added that, “Nearly 24 million Americans remain unemployed, underemployed, or have just stopped looking for work. Long-term unemployment remains at record levels.”
But presiding over a hearing of the Joint Economic Committee on Friday morning at the Capitol one hour after the jobs data was released, Rep. Elijah Cummings, D- Md., noted that there had now been 30 consecutive months of expansion in the manufacturing sector “and the unemployment rate has been moving in the right direction. During 2011 the national unemployment rate fell from 9.4 to 8.5 percent…. We’re making progress.”
Cummings argued that the recovery needed to be bolstered by “extending the payroll tax cut for the remainder of the year and continuing the unemployment insurance for workers who are counting on these benefits to make ends meet. Both of these policies put money in people’s pockets, boosting demand, creating jobs, and strengthening our economy.”
Moody's Analytics' Mark Zandi explains the latest jobs report and says the numbers released are unambiguously positive.
Congress is now wrestling with how to offset the cost of a package that would extend the payroll tax cut and continue unemployment benefits.
Indeed the proponents of the payroll tax cut and extended unemployment benefits can’t argue the economy is really perky, because then there’d be no need for those two stimulus measures.
In an interview with CNBC Friday morning after the jobs data was announced, the chairman of Obama’s Council of Economic Advisors, Alan Krueger, also made the case for the payroll tax cut and extended unemployment benefits “so that we can build on the momentum that started toward the end of last year and seems to be continuing the beginning of this year.”
In an ironic comment mocking Republican rhetoric, the Center for American Progress Action Fund, a progressive ally of Obama, said on Twitter, “Obama's job killing policies have created 3.3 million private sector jobs since 2010.”
From the left, Bob Borosage of the Campaign for America’s Future warned, “Don’t break out the bubbly. Any celebration should stay sober.” He pointed out that nearly a third of the unemployed have been out of work for a year or more. “These are the true casualties of Wall Street’s excesses,” he said.
He added, “American companies are producing more now than they did before the collapse. But Americans aren’t sharing in the rewards. Profit margins are at record heights; CEO salaries have soared, but there is no recovery in jobs, and wages and benefits continue to fall behind.”