Jobless decline could set tone for presidential race

Dayton Daily News - March 3, 2012

Randy Tucker

Ohio got a burst of positive unemployment news Friday, just as Ohioans prepare to vote in Tuesday’s presidential primary.

Ohio’s unemployment rate of 7.7 percent in January is the lowest monthly rate since November 2008 and well below the national rate of 8.3 percent.

“We think it is a sign that Ohio’s job market continues to improve and the economy continues to strengthen,” said Ben Johnson, Ohio Department of Job and Family Services spokesman.

Unemployment will no doubt be an issue in the presidential election, and if the positive trend holds throughout the year, President Barack Obama could get a major boost.5

No incumbent president since 1956 has lost re-election when the national unemployment rate declined in the two years leading up to the general election.

The national rate has dropped from 9.8 percent in November 2010. Ohio’s rate has declined even further, from 9.4 percent to the current 7.7 percent.

The rate is still painfully high, and Republicans point out that no president since Franklin Delano Roosevelt has won re-election with an unemployment rate above 7.2 percent.

The employment trend, however, may be a more accurate indicator, and after the Ohio unemployment numbers were released Friday, U.S. Sen. Rob Portman, R-Ohio, quickly released a statement saying the numbers are still too high.

“Many Ohio families are struggling, and rising gas prices are making it more difficult to make ends meet,” said Portman, who is supporting former Massachusetts Gov. Mitt Romney in the presidential race. “On President Obama’s watch, the price of gas has increased by a staggering 102 percent.”

In the statement, Portman argued for cutting spending, reducing regulations and expanding domestic production of energy as a recipe for getting the economy moving.

Chris Kelley, a political science professor at Miami University in Oxford, said the unemployment trend, if it continues, will work in Obama’s favor.

“Unemployment is trending downward, and business output is trending upward,’’ he said. “That positive tone is going to have a profound impact on people who are not committed partisans — those independent swing voters.’’

Presidents have gotten re-elected during periods of high unemployment, including conservative icon Ronald Reagan.

The national rate in 1984 was 7.2 percent, while Ohio’s unemployment rate stood at just more than 9 percent. Reagan benefited from a sharp drop from double-digit unemployment, and won in a landslide on a platform that the economy was improving.

Obama has adopted a similar strategy, and the unemployment trend seems to be cooperating. Ohio’s revised rate of 7.9 percent in December marked the first time since November 2008 that the state jobless rate fell below 8 percent.

Still, if Obama wants to duplicate Reagan’s feat, the economy must continue to grow to stimulate hiring, said Kevin Holtsberry, president of the Columbus-based conservative public policy think tank, The Buckeye Institute.

“There’s still angst and worry about the economy,’’ Holtsberry said. “If something were to happen in the Middle East or some other event in the economy that would undercut his ‘pro-growth, we’re-getting-better, we’re-right-on-track message,’ that gives him (Obama) a real challenge. And there are still a lot of economic indicators that say the economy is going to struggle for quite some time.’’

Federal Reserve Chairman Ben Bernanke told Congress this week that while the economy is adding jobs at a faster rate than many economists expected, high gas prices, government layoffs and the still-distressed housing market could derail that progress.

Holtsberry said the recent trend in unemployment combined with other positive economic indicators gives Obama “a minor plus’’ in his re-election campaign. But he still thinks the president is on shaky ground.

“The stock market is growing. The economy seems to be doing better, and my gut sense is that that helps President Obama,’’ he said. “But it’s not some sort of big wind behind his back. Things are getting better, but I don’t think they’re getting better enough so people feel like, “Oh, problem solved. Everything’s great.”

Zach Schiller, research director at the left-leaning Policy Matters Ohio research group in Cleveland, said surging consumer confidence could send the unemployment rate moving in the other direction by getting more people into the work force.

“A lot of the decrease in unemployment that we’ve seen has been because people are dropping out of the labor force’’ and are no longer counted as unemployed, Schiller said. “When people become more confident in the labor market, they’re actually more likely to join the labor force.” But, he noted that in the coming months, if more people decide the job market has improved enough to job-hunt again, they would be counted in the unemployment rate, forcing it to rise.

Jobless decline could set tone for presidential race

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