President Barack Obama will close out his campaign to reclaim the White House with an economic breeze at his back.
The Labour Department said Friday that U.S. employers added 171,000 jobs in October, considerably better than Wall Street’s meagre expectation for a 125,000 gain, and the unemployment rate stayed below the psychologically important level of 8 per cent for a second consecutive month.
When considered against the U.S. economy’s potential, those aren’t great numbers. Between 2004 and 2006, American employers added more than 200,000 jobs in a month 14 times. And the Federal Reserve sets interest rates to achieve a jobless rate of about 5.5 per cent.
Still, given where the U.S. economy has been, the October figures are more positive than negative. Revisions to the Labour Department’s previous estimates for August and September also added 84,000 positions to non-farm payrolls.
Employers now have added workers at a pace faster than 2012’s average gain of 157,000 in three of the past four months, evidence the U.S. economy is pulling out of a spring slump that bolstered Republican challenger Mitt Romney’s criticisms of Mr. Obama’s policies.
The report, always an important barometer of economic strength, was even more anticipated than usual because it came four days ahead of the Nov. 6 vote. Many say the election will be won by the candidate voters believe is best equipped to restore the U.S. economy to its renowned swagger.
Few presidential incumbents have won re-election without economic momentum to pull them along. Many among the Washington punditry have said that Mr. Obama’s hopes rested on the unemployment rate dropping below 8 per cent by Election Day, still high by historical standards but a noticeable improvement from the recessionary peak of 10 per cent three years ago.
On that score, it is mission accomplished: The jobless rate was 7.9 per cent in October, after plunging to 7.8 per cent in September from 8.1 per cent. To the extent that voters remain undecided at this stage of the campaign, those numbers can only help Mr. Obama, said Andrew Busch, global currency and public policy strategist at BMO Nesbitt Burns in Chicago.
“On the surface, it looks great for the President,” Mr. Busch said. “With the election so close, anything that aids one candidate over the other will be helpful.”
Mr. Obama and Mr. Romney are running neck-and-neck in national opinion polls, trading leads within most surveys’ margins of error. Electronic betting sites that have a solid record of predicting election winners, such as the Iowa Electronic Market, give a clear advantage to Mr. Obama. Pundits are split; Mr. Busch, for example, is telling his clients that Mr. Romney will win, based on the Republican’s success with early voters.
Campaigning in Ohio, Mr. Obama counted the October jobs number as evidence that he is making “progress” on the agenda that won him the presidency in 2008. In Wisconsin, Mr. Romney seized on the 7.9-per-cent jobless rate to make the rhetorical point that “unemployment today is higher than the day Barack Obama took office.” The unemployment rate was 7.8 per cent when Mr. Obama was inaugurated in January, 2009.
Traders were unmoved by the latest jobless figures. Stock markets initially jumped on the better-than-expected report, then fell back over the rest of the trading day.
It is possible that election watchers will get more excited about the October jobs figures than will most voters. Polls indicate that all but a sliver of the voting public already has made up its mind. The economy is getting better, but there still are some four million fewer jobs in the U.S. now than there were before the recession and average wages last month were only 1.6 per cent greater than a year earlier.
“This last report will make little difference in the race,” said Tony Fratto, a partner at Hamilton Place Strategies who served as a senior spokesman for former president George W. Bush. “No one should confuse this with being a strong economy,” he added. “There’s just enough growth for Obama to run on, and [it’s] just bad enough for Romney to run against.”