For the next month, as Americans spend their holiday-season billions, President Obama has something he’s never really had before: an economic indicator he can crow about.
There are plenty of caveats, but all that matters for December is that the unemployment rate dipped well below 8.6 percent.
Obama needs leverage to push Republicans to accept the Democratic proposals to extend the payroll tax cut and other demand sweeteners. Even as Republicans complain that the labor force is shrinking because workers are discouraged, artificially pumping up the unemployment rate, they’re bound to feel at least some pressure to compromise.
The situation reverses Obama’s odds last summer, when the economy seemed to stall right as he began to negotiate with Republicans over the debt ceiling.
“Congress needs to extend the payroll tax cut for working Americans for another year. Congress needs to renew unemployment insurance for Americans who are still out there pounding the pavement looking for work,” Obama said on Friday.
"Now is not the time to slam on the brakes. It's time to step on the gas. We need to get this done. And I expect it's going to get done before Congress leaves. Otherwise, Congress may not be leaving, and we can all spend Christmas here together."
Reluctant to engage Congress after the debt debacle, Obama plans to do so in the next several weeks, using the threat of an impending tax hike to break through Republican orthodoxy.
The White House will say that there have been 21 consecutive months of private-sector job growth, and that’s an important trend line. Indeed, the economy has regained a third of the jobs it lost in the Great Recession. But privately, they understand the political value of the single number used as a proxy for how people perceive the economy.
And, no matter what the GOP talking points say, a steady sled of job creation will help.
Still, Obama's not likely to shout too loudly. Managing expectations ahead of the election is more about restraint than bragging.
But if Americans think the economy is finally getting better, and small business owners have thrown off the monkey of a possible second recession, they’ll spend more this holiday season.
With the sun comes the showers: The White House expects the unemployment rate to jiggle up and down in 2012, although they hope to see a steady downward curve by the summer. It’s precisely those jitters that have kept consumer confidence low and amplified the effects of what has turned out to be a virtual nationwide hiring freeze by companies sitting on cash. And if the eurozone collapses, good-bye modest recovery.
In reacting to Friday's news, the man the White House considers to be the likely Republican nominee, Mitt Romney, borrowed from Obama's 2008 rhetoric.
“The Obama administration may have come to accept such a high level of joblessness as the new normal. I will never accept it,” Romney said in a statement. “To me, the fact that so many millions of Americans are unemployed only highlights the urgent need for a fundamental change in the direction of our country.”
Romney's main message to voters in the GOP primary and nationally is that he (and only he) can fix the economy; Obama's in over his head.
“For Republicans, the challenge will be to avoid cheering down the economy as it fumbles along,” wrote Matt McDonald, a Republican and partner at Hamilton Place Strategies, in a note to clients on Friday.
“Mitt Romney can’t beat me,” Obama is fond of telling visitors in private, “but the economy can.”
No doubt Friday’s unemployment numbers give the president some confidence.