The American jobs engine hit stall speed in May, with the economy adding just 69,000 new jobs while the unemployment rate climbed to 8.2 percent. [CNBC]
PRESIDENTS CAN’T create jobs to move the economy, but they can fall because of it.
The news was bad on Friday, with Dow Jones futures reacting immediately upon opening, with world markets weak.
There were also signs that growth China, which was a bulwark during the global recession, is slowing significantly. China’s manufacturing weakened in May, according to surveys released Friday. The European debt crisis is pinching exports from China, and leaders in Europe must decide whether to abandon the severe budget cuts that have lengthened unemployment lines across the continent. [Yahoo!]
…and we haven’t even gotten to Greece and the fallout if it leaves the euro.
However, people holding on to national polls and an economy that’s dipping weaker for now need to look deeper for predictors of what may happen in November. Ben White hits this point in Politico today, focusing on swing state economics that matter more than anything else for November:
“Most of the swing states by the third quarter of this year will have a lower unemployment rate than the national average,” said Xu Cheng, a senior economist at Moody’s Analytics who compiled the latest state-by-state economic data and updated Moody’s voting model for POLITICO. “And most of the battlegrounds will be below 8 percent unemployment, which will negate the ‘grumpy voter effect.’” Cheng was referring to data suggesting voters will discount by half any improvement in joblessness if the national rate remains above 8.
The Moody’s model, which accounts for unemployment, historical voting patterns, per capita income and other factors, currently predicts Obama will win at least 26 states and 303 electoral votes. The model is one of the few to forecast voting patterns based on economic statistics and other data. In 2008, it came within 25 votes of Obama’s margin in the Electoral College.
Of course, a lot can change between now and November. Europe is again on the cusp of crisis, with Greece possibly leaving the euro. Markets could grow skittish over the prospect of the “fiscal cliff” that will hit early next year when up to $7 trillion in tax cuts expire and spending cuts could slam the economy. Home prices appear to have bottomed out in many key places, but they could fall further.
As a snapshot, the jobs numbers today are bad, no other way to spin it. It’s another chapter in the story for 2012, but it’s not the end of the story.
It does, however, give Mitt Romney a springboard for what he’s been talking about for a long time on the economy: “Obama isn’t working.” The other side, however, is that in battleground swing states where he’s also campaigning, Romney’s meeting a climate where the economy isn’t bad, with states actually recovering.
It’s economics, which means it’s complicated for both candidates. However, with people already disapproving of Pres. Obama’s handling of the economy, today’s numbers are very bad news.