President Obama spoke in the Rose Garden today a few hours after the the Bureau of Labor Statistics reported that April's job numbers were the best in four years, with nearly 300,000 jobs created. The comment that seems to be getting the most attention is his statement that "from the first days of this administration, amidst the worst economic crisis since the Great Depression, I've said that the truest measure of progress would be whether or not we were creating jobs." Right on.
But today's news that both jobs and the unemployment rate increased is a microcosm of the challenge the administration will face for the rest of the year. Employment numbers will be the administration's friend. The unemployment rate will not.
Here's why. Job growth should accelerate in the next few months. Barring a double-dip, we will continue to see positive numbers for the rest of the year. But most people -- including independent analysts and the White House -- expect unemployment to remain above 9% until the end of the year. That means that even after eleven months of job growth, Democrats might be going into the election with the second highest unemployment in a midterm year since the 1940s (in 1982, Republicans lost 26 House seats as unemployment blew by 10%).
The technical reasons for this discrepancy between job growth and the jobless rate are that more Americans who left the labor force will re-enter as they become encouraged by hiring prospects. If the employment denominator increases near the rate at which jobs are added, that makes it hard for the unemployment ratio to fall dramatically.
In short, the White House wants to convince us that the jobless rate is an inaccurate measurement of improvement in the job market. Even with a consistent a clear message, it will still be difficult to cheer up the labor market if 17 percent of our friends -- equivalent to the population of Texas -- are broadly unemployed.
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