Obama's Most Promising Re-Election News
NEW YORK (TheStreet) -- Barack Obama received promising re-election news Thursday, but you may have missed it if you only track monthly jobs reports.
Claims for jobless benefits fell to their lowest level in four years as overall claims dropped to 348,000, which was less than the forecast of 365,000 by economists polled by Bloomberg.
"If this trend continues, one would have to believe, given previous relationships, that the monthly employment report will begin printing 200K plus job additions on a regular basis," Dan Greenhaug, BTIG chief global strategist, wrote in a note.Should that prediction ring true, Obama could expect to see unemployment drop below 8% -- a threshold highlighted often by his potential Republican opponents. "I'm in this race because I believe that America can be turned around, that we don't have to accept unemployment over 8 percent," Mitt Romney said last Friday in a statement. The unemployment number is among the most important economic indicators that could determine November's election, and the most recent unemployment reports have rung favorably for the incumbent president. Yale economist Ray Fair said in a Feb. 3 interview that Obama can't rely on one or two months of better-than-expected results, but he said it would be crucial for per-capita GDP to grow in the three quarters before the election -- Fair argued that voters would take that scenario as a positive sign. The first quarter of 2012 has moved favorably in Obama's corner as the January unemployment rate dropped to 8.3% from December's 8.5% as the economy added 243,000 jobs. Last week's jobs report showed claims had dropped below 350,000, which economists typically associate with sustained strength in the labor market, according to Reuters. After the Beureau of Labor Statistics reported the promising numbers, Romney highlighted the fact that the economy grew in 2011 at its slowest, non-recession-year clip since the end of World War II. The former Massachusetts governor might have to pivot his grievances if job growth continues to swell -- but that also assumes that Romney will win the GOP nomination and that encouraging economic forecasts are correct. "The number that a Democrat incumbent needs to be the most focused on is the unemployment number," said Billy Vassiliadis, CEO of R&R Partners, in a December interview. "The president's re-election chances are going to be enhanced or diminished by the next 10 months of looking for some economic hope." If you follow Fair's theory of per-capita GDP growth in 2012's first three quarters, the indicators are in Obama's favor, but it's far from certain to say this will continue. Greenhaus, though, seems confident about Thursday's weekly jobs report: "That today's number was not only better than expected but much better than expected can only be received warmly, providing further evidence that at least on the firing side of things, the labor market is improving considerably." In political time, the presidential election is years away, but for now Obama could consider the latest drop in unemployment claims as a freight train gaining momentum. -- Written by Joe Deaux in New York. >Contact by Email. >Follow Joe Deaux on Twitter. Subscribe on Facebook.
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