THE RESET: Jobs may return as 2016 campaign issue
- Article by: TOM RAUM
- Associated Press
- December 7, 2012 - 12:43 PM
Jobs were a signature issue of the 2012 elections. And they're likely to be so in the 2014 midterm and 2016 presidential contests as well.
That's because the jobless rate may not return to its pre-recession levels of 5-6 percent for another five to 10 years.
President Barack Obama clearly has benefited politically from the drop in the jobless rate from its peak of 10 percent in October 2009 to just below 8 percent on Election Day. The Labor Department Friday said that the rate dropped still more — to 7.7 percent in November from October's 7.9 percent.
The White House quickly hailed "further evidence that the U.S. economy is continuing to heal."
But Alan Krueger, chairman of the president's Council of Economic Advisers, also acknowledged "more work remains to be done."
Recovery from the 2008-2009 recession is at the slowest pace since the post-Great Depression period. Economic growth has averaged a shade over 2 percent so far this year. The latest White House forecast sees it rising to only 2.7 percent in 2013.
Major private forecasts don't see growth above 3 percent or unemployment below 7 percent until 2015 at the earliest.
And that's assuming politicians can reach a budget deal to avoid the so-called "fiscal cliff" of across-the-board tax increases and spending cuts due to kick in at the start of the new year.
Heidi Shierholz, an economist for the labor-oriented Economic Policy Institute, suggests "it will take about 10 years" to get back to pre-recession unemployment levels. "This isn't good news."
Forecasters say the economy must grow by 4 to 5 percent a year and add around 350,000 jobs a month — compared to 146,000 last month — to bring the jobless rate down to 6 percent before the 2016 elections.
And much of the recent improvement reflects a drop in the number of adults looking for work — not new jobs.
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