Will America’s recovery come through fast

enough for the president?

Jan 14th 2012 | WASHINGTON, DC | from the print edition

WITH an election less than a year away and the structural headwinds holding back job growth, time is not on
the president’s side.

Or so this newspaper warned in October 2003. The fact that George Bush junior went on to be re-elected may
be encouraging for Barack Obama. Job growth in the current recovery has been shockingly weak, but the same
was true of the previous two recoveries. The turnaround came too late to save the job of George Bush senior.
But his son fared better. Employment continued to fall for nearly two years after his recession ended in
November 2001, but reversed direction in time to save his job (see chart).

In this section
Mitt Romney marches on
»That 2004 feeling
No way out
Another one in the net
The downgrading of Europe
Running out of moves
Reprints

Related topics
Labour market
Job growth
Lagging Economic Indicators
Barack Obama
Business

Could Mr Obama enjoy the same late boost? On January 6th the government reported that employment had
risen by 200,000 in December compared with November, the best gain since April, corroborating a cluster of
other reports that show an economy picking up steam. As in previous months, cuts by state and local
governments held back the total, but those cuts are, finally, diminishing as receipts to state coffers start to rise
again. The unemployment rate, meanwhile, has fallen half a point in the past three months, to 8.5%, the
lowest since early 2009.

The news isn’t quite as good as it looks. Package delivery companies added 42,000 employees, a large
proportion of whom were no doubt sacked once the online holiday shopping season ended. Construction
payrolls rose 17,000, mostly because of unusually mild weather. The fall in the unemployment rate is also due
in great part to strangely low growth in the labour force, a troubling sign for the underlying vigour of the
economy. Monthly job growth averaged 142,000 in the second half of 2011, which is probably closer to what
can be expected for 2012. The economy still faces the problems of heavily indebted consumers, moribund home
sales, and fiscal austerity at all levels of government. But all these things are, at the margin, getting better,
rather than worse.

Whether this will change Mr Obama’s fortunes in time for the election is another matter. Employment is
climbing out of a far deeper hole now than in 2004, and there’s almost no chance the unemployment rate will
be below 7.3% come November, said to be the historical dividing line between winning and losing incumbents.

But Tony Fratto, a spokesman in Mr Bush’s administration, says the raw data matter less to voters than their
personal sense of whether things are getting better, for example if a friend leaves a job for a better
opportunity, rather than because he was fired. Government data show that the proportion of people who leave
a job because they quit is growing, and now exceeds the share who leave because they are sacked, by a
widening margin.

In 2004 Mr Bush could tout his credentials on battling terrorism even if the economy was lacklustre. Now, the
economy swamps all other priorities, even the killing of Osama bin Laden. Mr Obama will have little to boast
about if the recovery fizzles out; but his opponents will have even less to say if it continues to gather speed.