James Pethokoukis

Politics and policy from inside Washington

9 reasons why the Dec. jobs report is bad news for Dems

Jan 8, 2010 15:33 UTC

Talk about one last gasp from the horrible year that was 2009. On the political front, the December jobs numbers were terrible news for the White House and congressional Democrats in a midterm election year. Here’s how it plays out:

1. Remember this simple formula: Unemployment drives presidential approval numbers, and presidential approval numbers drive midterm election results.

2. President Barack Obama’s approval numbers are hovering just a tick below 50 percent. Since 1962, the average House midterm loss for the president’s party when his approval is sub-50 percent is 41 seats. The GOP needs 40 to take the House.

3. And make no mistake, the December unemployment numbers were bad both economically and politically. The 85,000 job loss was worse than expected and will be played that way the media. The continuation of double-digit unemployment also resonates with voters. And not a in a good way.

4. Then will come the second-take stories that will notice the shrinking labor force, which dropped by nearly 700,000 from November. Had it stayed stable from last month, the jobless rate would have been 10.4 percent. Had it stayed stable since August, the jobless rate would be 11 percent!

5. But wait, there’s more! The U-6 rate rate which combines the basic jobless rate, discouraged workers, part-timers-who-would-rather-be-full-timers climbed to 17.3 percent. And the average duration of unemployment rose to a record high 29.1 weeks.

6. Also, there is every indication that as the slowly growing economy eventually draws workers back into the labor force, the jobless rate will creep up to new highs. (Big companies remain cautious about hiring, and small biz remains under pressure due to tight capital markets.) The validity of the Obama recovery plan will seriously be cast in doubt.

7. The sickly labor market will also make it that much harder for the White House and Hill Dems to celebrate what is likely to be a brisk upcoming GDP report in the 4-5 percent range. That seems like an abstract number compared to the unemployment rate.

8. Combine a weak labor market – which may appear to be getting worse to voters – with the moribund housing market and rising gas prices, and you have a toxic triple threat that will be poisonous to Democratic incumbents and further drain Obama’s political capital.

9. Also, watch how these numbers play with Senate and House Dems thinking about resigning like Chris Dodd and Byron Dorgan.  A big improvement in the jobs numbers might have reassured any worriers that 2010 might not be as tough as some currently think. Now it looks a bit more like the worst fears of Democrats might be realized: losing the House and a half-dozen or more Senate seats.

COMMENT

I personally believe that corporate conservatives are purposely not hiring or layng off to make the Obama administration look as bad as possible to the American public before the 2010 election. It’s what you call “Disaster Capitalism” and it is manmade.

Posted by Betty | Report as abusive

What the December jobs report means

Jan 8, 2010 14:00 UTC

I think the “jobless recovery” meme stays firmly in place. Beyond the 85k jobs loss was the sharp drop in the labor force participation rate. If another 600k+ workers had not dropped out of workforce, unemployment rate would have been 10.4 percent. Here is what I have tweeting on the subject this AM:

tweets010810

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