Unemployment Uninspiring

The lead article in today’s New York Times is titled, “Unemployment Hits 9.7% Despite Slower Job Losses.” It reports that the unemployment rate in August rose from 9.4% to 9.7% despite reports of the economy improving. The article talks about a jobless recovery and compares it to the last recession in 2001 when unemployment rates continued to decline for two years after the recession was over.

According to the article, government officials said the figures would be much worse if the stimulus plan hadn’t been enacted, and at least the economy wasn’t in “free fall” like before. But the article also notes that consumer spending drives 70 percent of economic growth, and it’s hard to see how this presents good news about even a jobless recovery. One bright spot: two-thirds of the stimulus money remains to be spent.

In my opinion, these statistics present a real political hazard to President Obama. While the American people have difficulty understanding more complex policy matters, they do understand statistical benchmarks that have been around for a long time, and catch-phrases used by the opposition. If the unemployment rate hits double digits, as expected, you know the Republicans will exploit that with every rhetorical flourish at their command.  Any Party who can turn the health bill into “death panels” will have a field day with double digit unemployment.

The Obama administration needs to focus on the economy like a laser beam if it wants to hold Congress in the mid-term elections. Yes, it’s that serious. To borrow a line from President Clinton’s campaign: “It’s the economy, stupid.”