President Obama may be getting great pleasure from the Republicans’ lengthening battle over who can beat him in November. But he faces a much stronger opponent between now and then: a weakened U.S. economy.
The news media plays up the least little sign that the Obama economy may be improving slowly, but after three insufferable years of high unemployment and a still-subpar year-over-year economic growth rate, he has yet to convince a majority of Americans that he has restored the economy to health and prosperity.
The 3 percent fourth-quarter growth rate in the nation’s gross domestic product was welcome news, but the fact is that the Obama economy grew at a sluggish 1.7 percent for all of 2011.
It isn’t expected to do a great deal better this year, either, according to the National Association for Business Economics. The association is predicting just modest growth of 2.4 percent for the rest of this year.
Americans may not follow the economic growth rate that closely, but they do follow the unemployment rate, which has always been a lagging economic indicator. That, in the end, may be Mr. Obama’s political undoing in the fall.
The government’s unemployment rate, which has to be taken with a large grain of salt, is 8.3 percent. But daily surveys conducted by the Gallup Poll put the jobless rate at 9 percent, and worse, the “underemployment rate” that includes people who can’t find full-time work or have dropped out of the work force at 19 percent.
Independent economists also think the government’s statistics undercount the real unemployment rate. “But for an alarming increase in prime-working-age adults choosing not to look for work, unemployment would be 13 percent,” says University of Maryland business economist Peter Morici.
In another gloomy economic forecast, Federal Reserve Chairman Ben S. Bernanke told lawmakers Wednesday that the nation still faced major economic and fiscal challenges before it was going to fully regain its health.
“The unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part time for economic reasons is very high,” Mr. Bernanke told the House Financial Services Committee.
He reiterated that the unemployment rate isn’t likely to drop much more than it has so far and that any further decline will “edge down only slowly in coming years.”
If Mr. Obama is hoping the unemployment rate will fall gradually over the year and lift his chances for a second term, Fed forecasters threw cold water on that notion.
They are predicting that the unemployment rate will still be between 8.2 percent and 8.5 percent at the end of this year.
The National Association for Business Economics, in a report Monday, said it, too, expected unemployment to remain stuck at 8.3 percent for the rest of 2012. And it does not see the economy growing by more than a lackluster 2.4 percent for the year. Not a pretty picture for Mr. Obama or for millions of beleaguered, jobless Americans.
The White House knows full well that no president since the Great Depression has won a second term when the national jobless rate has been above 8 percent.
This will come as a shock to former Pennsylvania Sen. Rick Santorum, who lately has been emphasizing social, cultural and religious issues in his campaign for the GOP nomination, but a recent Gallup poll shows those are not big concerns of the American people right now.