Analysis: Joblessness down, some still downbeat

By Jim Kuhnhenn

Associated Press

Published: Saturday, March 5 2011 1:40 a.m. MST

While private employers added 222,000 jobs last month, some analysts noted that when averaged with more meager number of new jobs in January, the increase in payrolls is similar to the monthly pace in the last quarter of 2010.

"On the unemployment rate, for sure there are going to likely to be blips," Goolsbee said in an interview. "Nobody knows, is 8.9 the rate or will it go up? That could happen."

But he added: "The three-month trend, the one-year trends of substantially adding jobs in the private sector and substantial reductions in the unemployment rate are exactly what we want."

The White House is certainly counting on those trends moving in their favor. The economy — and high unemployment — were key factors in last November's Republican election wave.

At the time, the unemployment rate had been rising for six straight months. But since the 9.8 percent high of November, it has been dropping. Politically, the trend line could be as important as the unemployment rate itself.

In 1980, Jimmy Carter lost his re-election bid to Ronald Reagan as unemployment climbed from 6 percent in October of 1979 to 7.5 percent in October of 1980. Likewise, George H.W. Bush lost to Bill Clinton in 1992 in the midst of rising unemployment, which went from 6.9 percent September of 1991 to 7.6 percent in September of 1992.

But Reagan managed to get re-elected in 1984 even though unemployment stood at 7.4 percent in October of that year. Unlike Carter and Bush, Reagan's unemployment trend line had been dropping since the spring of 1983.

There are still trouble spots ahead for Obama.

"The main clouds of concern that we monitor are what happens in the Middle East with fuel prices and what happens with the financial system in Europe,"Goolsbee said.

In addition, public hiring by local and state governments remains an area of weakness. "State finances tend to lag the aggregate economy by six to 10 months," Goolsbee said. "It's likely to continue to be tough for them."

Those are clouds that can still dampen an economic recovery — and complicate a president's political prospects.

EDITOR'S NOTE — Jim Kuhnhenn covers the White House for The Associated Press.

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