President Barack Obama is getting a political boost as the unemployment rate in the U.S. falls faster than it did when Ronald Reagan was seeking re-election.
The CHART OF THE DAY shows unemployment slid to 8.3 percent in February from 9.1 percent in August, a 0.8 percentage-point decline. Over the corresponding six-month period in Reagan’s first term, the rate fell 0.7 percentage point, to 7.8 percent.
Reagan was the only chief executive since World War II to be re-elected with a rate above 6 percent, beating Walter Mondale in 1984 with unemployment of 7.4 percent in October of that year. Obama is unlikely to see a level that low on Election Day in November: unemployment will end the year at 8.1 percent, according to a Bloomberg News survey of economists taken early last month.
“It’s not the level that matters, it’s the direction, and the confidence that households have that it will continue to fall under his continued leadership,” said Ellen Zentner, a senior U.S. economist at Nomura Securities International Inc. in New York. “Based on the data as it stands today, there is enough momentum in the economy to work in Obama’s favor.”
Employers in the U.S. added 227,000 workers to payrolls last month, and the jobless rate held at a three-year low, the Labor Department said today in Washington. About 1.2 million jobs have been created in the last six months, the most since the six months ending in May 2006.
Many voters make up their minds about half a year before Election Day, Zentner said. “It is critically important that the data doesn’t weaken over the spring and summer months leading up to the election,” she said. “Households, and voters in particular, have to be convinced by the current leadership that the unemployment rate is going to continue to fall if they are re-elected.”
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