Politics: Need-to-Know Video

N2K: Unearthing the Message Against Climate Change

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April 20, 2011, 8:10 p.m.

A Fox News poll; con­duc­ted 10/9 by Pulse Opin­ion Re­search (IVR); sur­veyed 1,000 LVs; mar­gin of er­ror +/- 3.1% (re­lease, 10/12). Party ID break­down: 35%D, 31%R, 34%I. Tested: Sen. Patty Mur­ray (D) and ‘04/‘08 GOV nom­in­ee Dino Rossi (R). Note: Pulse Opin­ion Re­search uses “meth­od­o­logy and pro­ced­ures li­censed from” Rasmussen Re­ports (IVR).

Gen­er­al Elec­tion Match­up

- All Dem GOP Ind Men Wom 9/25 D. Rossi 47% 4% 93% 49% 48% 46% 47% P. Mur­ray 46 91 4 39 42 50 48 Oth­er 7 6 3 12 10 4 2 Un­dec 0 0 0 0 0 0 3

Fav/Un­fav

- All Dem GOP Ind Men Wom P. Mur­ray 45%/48% 88%/ 9% 6%/90% 37%/50% 38%/52% 52%/44% D. Rossi 43 /49 7 /90 88 / 8 38 /44 41 /48 45 /49

(For more from this poll, please see today’s WA In The States stor­ies.)

Forty years ago, high-end com­puter and au­di­o­tape man­u­fac­turer Mem­orex ran a clas­sic tele­vi­sion ad in which jazz great Ella Fitzger­ald sings a high note and shat­ters a wine glass. Then her taped mu­sic plays with glass-shat­ter­ing crys­tal clar­ity, and an an­noun­cer asks, “Is it live, or is it Mem­orex?”

Today, eco­nom­ists and oth­ers closely watch­ing the U.S. eco­nomy are ask­ing of last Fri­day’s un­ex­pec­ted drop in the na­tion­al un­em­ploy­ment rate from 9.0 to 8.6 per­cent, “Is it real or is it an out­lier?” For avid watch­ers of the 2012 elec­tions, it is a very im­port­ant ques­tion as well be­cause the eco­nomy, and spe­cific­ally un­em­ploy­ment, is the chief dark cloud hov­er­ing over Pres­id­ent Obama’s reelec­tion pro­spects.

Changes in the neigh­bor­hood of four-tenths of a per­cent­age point in the over­all un­em­ploy­ment rate from one month to the next don’t hap­pen of­ten. In fact, it’s happened only three times in the last five years (the rate jumped five-tenths of a point once in that peri­od). It’s also im­port­ant to note that each month’s num­bers are sub­ject to later re­vi­sion.

The Bur­eau of Labor Stat­ist­ics’ Novem­ber re­lease noted that the month’s read­ing was out­side of the 9.0-9.2 per­cent range that had held from April through Oc­to­ber. In ad­di­tion, the U-6 un­em­ploy­ment rate, an al­tern­at­ive meas­ure­ment of those who are un­em­ployed, are work­ing part-time but seek­ing full-time work, or have giv­en up look­ing, dropped six-tenths of a point, from 16.2 to 15.6 per­cent.

The move­ment in the new re­port is note­worthy and something that should be watched very care­fully, bar­ring later re­vi­sion. It could sig­nal the be­gin­ning of a real trend. At the same time, we should re­mem­ber the ad­age, “one month does not a trend make.” The Decem­ber num­bers will be re­leased on Fri­day, Jan. 6.

Some eco­nom­ists ex­press con­sid­er­able skep­ti­cism about the sig­ni­fic­ance of the shift. They point to the de­cline in the ci­vil­ian labor force par­ti­cip­a­tion rate to 64 per­cent, its low­est mark since the early 1980s. This is cited as an ex­plan­a­tion for the drop: Very simply, the un­em­ploy­ment rate may have fallen be­cause more people gave up look­ing for work. It’s worth not­ing that the 39-page re­lease from the BLS con­tains an enorm­ous amount of data from two sep­ar­ate sur­veys, one of house­holds and the oth­er of es­tab­lish­ments, with dif­fer­ent data of­ten send­ing con­flict­ing sig­nals.

Demo­crats note that un­der Pres­id­ent Re­agan, un­em­ploy­ment peaked at 10.8 per­cent in Novem­ber and Decem­ber of 1982 — sev­en-tenths of a point worse than the 10.1 per­cent peak for Obama’s term in Oc­to­ber 2009. However, the rate had dropped to 8.5 per­cent in Novem­ber 1983, one year be­fore Re­agan’s 49-state land­slide vic­tory. That Re­agan’s un­em­ploy­ment rate a year out from the gen­er­al elec­tion was only one-tenth of a point bet­ter than Obama’s is quite something, if it is real.

Re­agan’s first-term un­em­ploy­ment rate went on to drop to 7.4 per­cent in Oc­to­ber 1984, in the last set of num­bers re­leased be­fore the elec­tion; the sub­sequent Novem­ber 1984 rate was 7.2 per­cent. However, vir­tu­ally no eco­nom­ists ex­pect un­em­ploy­ment num­bers to im­prove that much by the end of next year. The two most op­tim­ist­ic of the 54 top eco­nom­ists sur­veyed last month by Blue Chip Eco­nom­ic In­dic­at­ors foresaw un­em­ploy­ment drop­ping to 8.3 per­cent. The latest Fed Novem­ber meet­ing minutes in­dic­ate that the most hope­ful of the Fed­er­al Re­serve Board mem­bers and Fed­er­al Re­serve Bank pres­id­ents pre­dicted an un­em­ploy­ment rate only down to 8.1 per­cent.

Need­less to say, the pess­im­ist­ic fore­casts were very dif­fer­ent: 8.9 per­cent for the most bear­ish Fed mem­ber can­vassed and 10.3 per­cent for the most fret­ful Blue Chip fore­caster.

Still, the nar­rat­ive of this pres­id­en­tial race would change enorm­ously if un­em­ploy­ment were to drop any­where near 8.0 per­cent, so this is something im­port­ant to watch. Un­em­ploy­ment has hovered at 9.0 per­cent or high­er for 28 of the last 31 months. This was also true for 28 out of the 34 com­plete months (leav­ing out his par­tial month of Janu­ary 2009) that Obama has been in of­fice. The pre­cise weight of the eco­nom­ic mill­stone around his neck is an im­port­ant factor.

Lest any­one get car­ried away, the pros still think the Novem­ber job­less num­ber was an out­lier. But even if the 8.6 per­cent rate isn’t re­vised up­ward and is rep­lic­ated in sub­sequent monthly re­ports, some key ele­ments of the Demo­crat­ic base — the groups that turbo-charged Obama’s White House vic­tory — are still fa­cing tough eco­nom­ic head­winds that could af­fect their en­thu­si­asm and turnout next year. The Novem­ber un­em­ploy­ment rate among Afric­an-Amer­ic­ans was 15.5 per­cent. Among His­pan­ics, it was 11.4 per­cent. For 18 to 19 year-olds, the job­less rate was a whop­ping 23.6 per­cent; 20 to 24 year-olds saw a 14.2 per­cent rate; and 25 to 34 year-olds came in at 9.2 per­cent.

Tough eco­nom­ic times, ad­ded to dis­ap­point­ment from per­haps un­real­ist­ic­ally high ex­pect­a­tions about hope and change that Obama could de­liv­er, could weigh down his pop­ular­ity with minor­ity and young voters. But by how much would it af­fect the 9.6 mil­lion pop­u­lar-vote and 95 Elect­or­al Col­lege-vote mar­gins that he en­joyed in 2008?

{{ BIZOBJ (video: 2924) }}

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