Two years ago the unemployment rate was 9.9
percent. Now it's 8.5 percent. At first blush that's good news for the
President. Actually it may not be.
Voters pay more attention to the direction the economy is moving than
to how bad or good it is. So if the positive trend continues in the
months leading up to Election Day, Obama's prospects of being reelected
But if you consider the number of working-age Americans who have
stopped looking for work over the past two years because they couldn't
find a job, and young people too discouraged even to start looking, you
The Bureau of Labor Statistics, which measures the unemployment rate
every month, counts people as unemployed only if they're looking for
work. If they're too discouraged even to enter the job market, they're
If all the potential workers who have dropped out of the job market
over the past two years were counted, today's unemployment rate wouldn't
be 8.5 percent. It would be 9.5 percent. That's only a bit down from
the 9.9 percent unemployment rate two years ago.
The genuinely good news, though, is the Bureau of Labor Statistics
also tells us 200,000 new jobs were added in December. Granted, this
doesn't put much of a dent in the 10 million jobs we've either lost
since the recession began or needed to keep up with the growth of the
working-age population (at this rate we won't return to our
pre-recession level of employment until 2019) but, hey, it's at least
the right direction.
But here's the political irony. This little bit of good news is
likely to raise the hopes of the great army of the discouraged -- many of
whom will now start looking for work.
And what happens when they start looking? If they don't find a job
(and, let's face it, the chances are still slim) they'll be counted as
Which means the unemployment rate will very likely edge upward in
coming months. This will be bad for the President because it will look
as though the trend is in the wrong direction again.