Jobs report a potential turning point in Obama’s reelection year

Reporting from Washington â€”  If President Obama wins reelection in November, Friday’s jobs report may be remembered as the turning point when he shifted from slight underdog to favorite.

“Where are the jobs?� has been the question at the heart of the Republican case against Obama. Mitt Romney’s campaign turns on the claim that his experience in the private sector taught him how to create new jobs. Obama, by contrast, has “failed� in that endeavor, he repeatedly says.

January’s growth – a net of 243,000 new jobs created, the most in nine months and almost double what most economists had forecast – undermines that argument, both Democratic and Republican strategists agreed. The problem may not be fatal for the GOP, but if the growth continues through the spring and summer, “there’s no way in the world that you can deny it helps Obama’s case,� said Whit Ayres, a Republican pollster.

The election-deciding question now is likely to be whether the economy does, in fact, sustain its current growth rate. Obama and his aides have bitter experience on that score: Both of the last two years, economic growth perked up in the winter or early spring, only to collapse again in the summer. Europe’s debt problems, rising gasoline prices and the continued loss of jobs in state and local governments, which shed a net of 14,000 positions even as the private sector expanded by 257,000, all have potential to derail the economy.

Having been burned before, the president tried to walk a careful line this time around.

“These numbers will go up and down in the coming months, and there’s still far too many Americans who need a job, or need a job that pays better than the one they have now,� he said during a speech in Virginia a few hours after the economic numbers were released. “But the economy is growing stronger. The recovery is speeding up.�

That caution is well-advised, said Matt McDonald, a Republican economic strategist and advisor to John McCain in 2008.

“It took them burning their hand on the stove three times, but they have learned not to touch that stove anymore,� he said. “After so many false starts it’s just going to take a while before people believe you. You want to be a cheerleader for the economy but you don’t want to be Pollyanna.�

Even if growth continues, Obama still cannot count on a smooth road ahead. His reelection bid comes at a time of deep discontent among voters, with only 1 in 4 telling pollsters they see the country on the right track. “The country is now far too unhappy for any incumbent to be an odds-on favorite for reelection,� said GOP strategist Mike Murphy.

Moreover, voters’ opinions about Obama are sharply polarized. Across 2011, an average of 80% of Democrats, but only 12% of Republicans, approved of Obama’s job performance, according to Gallup polls. George W. Bush’s ratings showed almost the same pattern, so that degree of partisan polarization has come to seem normal, but it was relatively rare in the 50 years before these two presidencies.

With that partisan division in place, the vast majority of voters appear to have their minds made up about Obama: About 45% want to reelect him and a similar number are determined not to. A dwindling number of voters in the middle will be targets for the vast resources the two parties plan to deploy in the months to come.

For those voters, the behavior of the economy almost certainly will be the deciding factor. Indeed, political scientists have shown repeatedly that the factors over which journalists and political insiders obsess – TV ads, campaign strategies, get-out-the-vote efforts – affect presidential election outcomes only a little. Instead, in the absence of a divisive war or huge scandal, election results closely track the economics of the election year.

The deciding factor is not the unemployment rate, which dropped to 8.3% in Friday’s report. Despite all the attention it receives, that statistic has almost no predictive value.

Unemployment can rise during improving times as a better job market causes more people to look for work, and it can go down in bad times as people drop out of the labor force. Instead, what appears to matter for elections is the rate of economic growth. The number of new jobs each month provides a ready measure of that.

January’s level of job growth does not approach the 1984 rate that powered Ronald Reagan’s “morning in America� reelection campaign. But it does compare well with the level of 1996, when Bill Clinton won his second term, and substantially exceeds 2004, when Bush beat John Kerry.

Republicans pointed to a report earlier this week from the Congressional Budget Office that forecast a slowing economy and rising unemployment this year. And they previewed the counter-argument on which they’ll rely if the jobs news continues good: “This president has not helped the process. He’s hurt it,� Romney told reporters in Sparks, Nev., after the jobs numbers were released. “We can do better.�

As Democrats were quick to point out, however, Republicans who insisted Obama take the blame for a poor economy may have a hard time convincing the public to deny him credit for an improving one.

They have little choice, however. Some Republicans, including ones associated with Romney’s conservative rivals, have suggested going after Obama on a wider range of issues. But “jobs are the crux of the campaign,� said Linda DiVall, a Republican strategist. Particularly among voters in the middle, “there’s nothing to suggest that other issues are replacing it.�

So far, those voters still feel considerable anxiety, and after months of slow growth last year, one or two good job reports won’t be enough to change their minds, DiVall said. “It generally takes three quarters of economic growth for people to feel that things are turning around,� she added. That’s just about the time Obama has between now and election day.

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