An unexpectedly rosy jobs report set off a chain reaction Friday, upending economists' gloomy predictions for the coming year, leading to a surge on Wall Street and potentially boggling the political calculus of the 2012 presidential campaigns.Boggling? In your dreams.
The surprise -- that the unemployment rate had dipped for the fifth straight month, to 8.3 percent -- was first reflected in the stock market, where the Dow Jones industrial average soared to its highest mark since the beginning of the financial crisis. The tech-heavy Nasdaq, meanwhile, hit an 11-year high.
"This morning we received more good news about our economy," Obama said during an appearance at an Arlington firehouse. "Still, far too many Americans need a job or need a job that pays better than the one they have now. But the economy is growing stronger."
Our economy? He said "our". That means he agrees it is no longer "Bush's economy".
The report forced his presidential rivals to adjust their rhetoric about the economy, which has played a leading role in the Republican debates. But they appeared ever ready to remind listeners that the unemployment rate remains elevated.
Ever ready. Evil Rethuglicans! Picking on The One, OUR President. No journalistic bias here!
"This is a game changer
The nation's economic forecasters, many of whom had predicted that the unemployment rate would remain stubbornly high this year, seemed to back off their gloomiest positions.
Right. Eight percent is not high. Let's see what happens when the good news gets some folks back in the market.
The Congressional Budget Office has predicted 8.9 percent unemployment for the year; the Federal Reserve has predicted between 8.2 percent and 8.5 percent for the year. Likewise, Moody's Analytics had expected the unemployment rate to remain at 8.5 percent through the end of the year.
Moody's Analytics, for one, is now reconsidering its predictions."The collective psyche seems to be turning a bit more optimistic," said Marisa Di Natale, the firm's director of economic research. "We're certainly going to revise our forecast."
Here we go. On page 2 -
The unemployment figures were startling enough that some analysts wondered whether they were correct. Friday's figures from the household survey were the first to incorporate the new population numbers from the 2010 Census. But the new unemployment rate was unaffected by the change, the Labor Department said.
The Obama Labor Department.
Obama's campaign team, and some political scientists, believe that voters are more likely to be swayed by the direction the unemployment rate is moving -- downward -- rather than its exact level.
Quick! Find somebody who supports that theory! Call California! Start with UCLA.
Lynn Vavreck, an associate professor of political science and communications at UCLA, has studied the effect of gross domestic product and the unemployment rate on presidential campaigns going as far back as 1952. Her analysis shows that there appears to be little or no connection between an incumbent president's vote share and the unemployment rate.
But there is a clear connection between votes for the incumbent and the direction the unemployment rate is moving.
Which way were the unemployment numbers moving when Carter ran for re-election?
On its Web site, the Obama campaign posted a chart that illustrated 23 consecutive months of private-sector job growth and encouraged supporters to e-mail it to friends "to make sure people know the good news about President Obama's record on jobs."
I wonder who made that up? Valerie Jarrett?
The chart included a summary of White House initiatives since Obama took office, including the Recovery Act, which provided a $787 billion stimulus; a bailout loan to the auto industry; and the payroll tax cut.
The campaign official said the chart had already become one of the campaign's most popular social media items, having been e-mailed and posted on Facebook and Twitter hundreds of thousands of times by Friday afternoon.
I wonder who made that up? Valerie Jarrett?
