WASHINGTON — For the first time in almost two years, the national unemployment rate fell below 9 percent, as the economy continued to add jobs in the private sector.
The report, which pegged the unemployment rate at 8.9 percent, was hailed by both Republicans and Democrats — though a national analyst said President Obama may have a lot more to smile about politically if this trend continues.
“While the creation of 192,000 new jobs in February is encouraging, we still must do more to promote economic growth and stability,” said Rep. John Kline, chairman of the House Education and the Workforce Committee.
“For too long, leaders in Washington have allowed government spending to spiral out of control, racking up record deficits and an unprecedented $14.1 trillion in national debt. As Speaker Boehner recently said, we’re broke going on bankrupt. And a bankrupt country cannot create jobs or foster a stable environment for investment.”
The change is primarily being driven by hiring in the private sector, said Austan Goolsbee, chairman of the White House Council of Economic Advisers. The unemployment rate has dropped by almost a full percentage point in three months, the largest decline over that time span since 1983.
“Though unemployment remains elevated, we are seeing signs that the initiatives put in place by this Administration – such as the payroll tax cut and the investment tax credit – are creating the conditions for sustained growth and job creation,” Goolsbee said. “The steep decline in the unemployment rate and the overall trend of economic data in recent months has been encouraging, but there is still considerable work to do to replace the jobs lost in the downturn. We will continue to work with Congress to find ways to reduce spending, but not at the expense of derailing progress in the job market, making the investments we need to educate our workers, investing in science, and building the infrastructure our companies need to succeed.”
And politically, the sunnier unemployment forecast continues a trend that could be very good news for the president. As prominent national elections analyst Charlie Cook noted earlier this week:
A rough rule of thumb is that if unemployment is at or near 9 percent, it will be a bad omen for Obama. But if the figure is at or close to 8 percent, it will be good news for the president, because the jobless rate will have improved significantly from its 10 percent level at the end of 2009. Some voters will reward Obama for progress on unemployment rather than punish him for policy or priority disagreements they may have had with him during his first two years in office.
The forecasts for GDP growth in the last quarter of 2012 range from a low of 3.4 percent to a high of 4.5 percent; the central tendency is between 3.5 and 4.4 percent. The range for unemployment is 7.2 percent to 8.4 percent, with a central tendency between 7.6 and 8.1 percent. The forecasts from the Fed are more optimistic than the latest Blue Chip Economic Indicators survey of private forecasters, who are suggesting GDP growth of 3.3 percent and an unemployment rate of 8.3 percent in the fourth quarter of 2012.
Of course, plenty of noneconomic factors will be weighing on voters’ minds, including foreign policy. Whom Republicans nominate is certainly relevant, as well. But the economic indicators are looking far better for Obama today than they did six months ago, and they seem headed toward a place where presidents tend to get reelected.
Today’s jobs report was another step in that direction.