"But the president has never created a job. He's never even had a real job, for God's sake. And I can tell you from my dealings with him, he has no idea how the real world, that we actually live in, works."
-- House Speaker John Boehner on “Kilmeade and Friends” on FOX News Radio.
The unemployment rate got worse in the month of July, but the rate of job creation got better. Huh?
It’s because the headline unemployment rate, which ticked up from 8.2 percent in June to 8.3 percent in July, is a poor measurement of the current state of the American labor force.
The status quo is not helpful to the president’s re-election ambitions, but is certainly preferable to the alternative. A return to full recession would make a second term for the president all but impossible.
The number of jobs created in July more than doubled from the previous month to an estimated 163,000, but the overall rate still went up. July job creation was above the approximately 125,000 new jobs that are needed each month just to keep pace with population growth, but not enough to actually bring down unemployment. But the unemployment number also reflects the size of the American labor force. In a stagnant economy like this one monthly gains are easily offset by changes in the number of people looking for work.
The headline number can go down even with poor job-creation numbers if more workers drop out entirely and the headline number can go up, as it did today, on relatively good numbers.
This jobs report includes a big seasonal estimated offset to account for summertime teacher layoffs, etc. Don’t be surprised if today’s number of new jobs is quietly revised down this time next month and the overall rate is revised up.
The hidden headline number in the July report is this: the report shows 155,000 people actually gave up looking for work.
That’s reflected in the real unemployment rate: 15 percent of the potential workforce can’t find work, has given up looking for work or has accepted a part-time job but needs fulltime work. That’s about 23 million Americans in a nation with an adult population of about 230 million.
July hiring returned to the approximate rate that it has been for most of the past year – enough to bring the headline rate down from 9.3 percent in July 2011 to 8.3 percent today. At that pace, it would be three more years to get back to a more normal rate.
The best news for President Obama and his re-election effort is that the July jobs report allays some concerns about a double-dip recession taking hold before November. The economy now looks likely to stay sputtery rather than shift into full reverse over the next 95 days.
The status quo is not helpful to the president’s re-election ambitions, but is certainly preferable to the alternative. A return to full recession would make a second term for the president all but impossible. The current stagnation is helping reinforce Americans’ notions that the country is on the wrong track – holding fairly steady around 60 percent in the Real Clear Politics average of polls since March – but sometimes the absence of an expected calamity can seem like a blessing.
Obama’s hope is that voters, especially when made to question the character of Republican Mitt Romney after six months of scorching personal attacks, will come to accept this as the new normal for the economy – that unemployment around 8 percent and low economic growth are unavoidable in a new, weaker global economy, the condition of which he says is partly due to the policies of Republicans past and present.
It’s Romney’s task to convince Americans that he has a plan that would change those dynamics. They seem receptive so far, but the former Massachusetts governor still seems to lack a clear, simply explained program that he can sell. Voters are inclined to believe that Obama doesn’t have the answer, but now is the time for Romney to start selling his plan with more clarity and zeal.
And Now, A Word From Charles
“In the end, Syria will remain a client state. Today it's client of Iran. If the rebels win, it will be and should be a client of Turkey. It has the most interest in it and has given the most support to rebels in refuge, organization, and weaponry. That to us is the preferable outcome, not an American client state but a Turkish state, which is Islamist, moderate, a friend of the United States, and a member of NATO.”
-- Charles Krauthammer on “Special Report with Bret Baier.”
Chris Stirewalt is digital politics editor for Fox News, and his POWER PLAY column appears Monday-Friday on FoxNews.com. Catch Chris Live online daily at 11:30amET at http:live.foxnews.com.
Chris Stirewalt joined Fox News Channel (FNC) in July of 2010 and serves as digital politics editor based in Washington, D.C. Additionally, he serves as the host of "Power Play" on FoxNews.com and makes daily appearances on the network including "America Live with Megyn Kelly," "Special Report with Bret Baier," and "Fox News Sunday with Chris Wallace." Most recently, Stirewalt provided expert political analysis during the 2012 presidential election.