WASHINGTON - George W. Bush has to be praying for a miracle -- a job-creation miracle.
Since taking office in January, 2001, the U.S. economy has shed nearly three million jobs. Statistics released on Friday showed the economy gained 57,000 jobs in September -- the first employment gain in eight months. But the unemployment rate remained at 6.1%.
But September's increased jobs total is only about a third of what Mr. Bush needs to see every month for the next year just to keep the unemployment rate from rising from its current 6.1%.
He is in the process of trying to raise US$200-million for his re-election campaign next year. All the while, he has to be thinking about what happened to his father.
The senior George Bush, a one-term president, lost to Bill Clinton in 1992, even after winning a decisive war in Kuwait, because he appeared out of touch with the domestic economy. The United States was just pulling out of the 1990-1991 recession. Unemployment hit a peak of 7.8% in June, 1992, as his presidential campaign was well underway.
Economist Bill Dudley at Goldman Sachs points out that the current president's once sky-high approval rating has taken a drastic turn south, not only because of worries Americans have about finding or keeping a job but also because of the difficulties in Iraq.
American soldiers continue to be killed on a daily basis. No one has found any weapons of mass destruction (or Saddam Hussein, for that matter). To many, the war in Iraq is increasingly looking like an ill-conceived attempt to reshape the Middle East landscape in the name of fighting terrorism. Or just a really bad idea.
"If these trends do not improve, George W. Bush could share the fate of his father and be a one-term president," Mr. Dudley says.
Over the next year, Mr. Bush has just two major tasks -- settle down the conflicts in Iraq and cross his fingers, waiting for the US$2-trillion in tax cuts he has brought to finally kick in.
It is that second task that he needs the most to win a second term. Some observers think Friday's numbers could be just the start of an upward trend.
Mark Olson, a U.S. Federal Reserve governor, was not the first to wonder out loud, but he was certainly the most influential. "When you have one month's numbers, you question, 'Is there some noise?' But in this case it looks like a pure number for us," he said optimistically over the weekend.
Added Bill Cheney, chief economist at Boston's John Hancock Financial Services: "While this is just one month of positive job growth, not enough to change the unemployment rate and overdue compared to expectations, one has to be hopeful that the jobless recovery is finally giving away to a healthy and sustainable expansion."
In George W. Bush's favour is a lower unemployment rate than the one that dogged his father. As well, the economy, though not producing an abundance of jobs, appears to be recovering quite strongly.
His critics, of course, will point to other statistics: there have been job losses in 26 out of the past 32 months, the worst since 1939, and that 40% of those without work have been pounding the streets for at least 15 weeks. That is the worst record in a decade.
Even since the recession officially ended in November, 2001, some 1.1 million jobs have evaporated. Virtually all of them have been in the still-struggling manufacturing sector.
If there is no immediate rebound in job creation -- and no one is expecting a quick turnaround -- then George W. Bush risks being the first president since Herbert Hoover to finish a term in office with fewer jobs than he started out with.
Still, there really is not much room for Mr. Bush to move. The soaring deficit virtually rules out any future tax cuts. The administration appears to have adopted, at least unofficially, a weak dollar policy to boost U.S. exports and making imports less competitive. So far, it is not working.
The Fed itself has little room to move with its key rate already at a 45-year low of 1%.
Instead, Mr. Bush can only continue to "talk up" the economy, much like the Federal Reserve presidents and governors have been doing over the past two weeks, in the hopes of it becoming a self-fulfilling prophecy.
Many economists are tentatively predicting an uptick in job creation next year. How quickly that comes -- if it comes at all -- is crucial for Mr. Bush. Mr. Cheney says it will not really matter if employment remains one million or two million below what it was four years ago when American voters go to the polls next November.
"Most evidence is that the direction of change is more important than the level," he says. "If job growth is enough to feel different by next fall, then G.W. is in luck."
Perception rather than reality is all that counts in a presidential election. Just ask George senior.
@
Since taking office in January, 2001, the U.S. economy has shed nearly three million jobs. Statistics released on Friday showed the economy gained 57,000 jobs in September -- the first employment gain in eight months. But the unemployment rate remained at 6.1%.
But September's increased jobs total is only about a third of what Mr. Bush needs to see every month for the next year just to keep the unemployment rate from rising from its current 6.1%.
He is in the process of trying to raise US$200-million for his re-election campaign next year. All the while, he has to be thinking about what happened to his father.
The senior George Bush, a one-term president, lost to Bill Clinton in 1992, even after winning a decisive war in Kuwait, because he appeared out of touch with the domestic economy. The United States was just pulling out of the 1990-1991 recession. Unemployment hit a peak of 7.8% in June, 1992, as his presidential campaign was well underway.
Economist Bill Dudley at Goldman Sachs points out that the current president's once sky-high approval rating has taken a drastic turn south, not only because of worries Americans have about finding or keeping a job but also because of the difficulties in Iraq.
American soldiers continue to be killed on a daily basis. No one has found any weapons of mass destruction (or Saddam Hussein, for that matter). To many, the war in Iraq is increasingly looking like an ill-conceived attempt to reshape the Middle East landscape in the name of fighting terrorism. Or just a really bad idea.
"If these trends do not improve, George W. Bush could share the fate of his father and be a one-term president," Mr. Dudley says.
Over the next year, Mr. Bush has just two major tasks -- settle down the conflicts in Iraq and cross his fingers, waiting for the US$2-trillion in tax cuts he has brought to finally kick in.
It is that second task that he needs the most to win a second term. Some observers think Friday's numbers could be just the start of an upward trend.
Mark Olson, a U.S. Federal Reserve governor, was not the first to wonder out loud, but he was certainly the most influential. "When you have one month's numbers, you question, 'Is there some noise?' But in this case it looks like a pure number for us," he said optimistically over the weekend.
Added Bill Cheney, chief economist at Boston's John Hancock Financial Services: "While this is just one month of positive job growth, not enough to change the unemployment rate and overdue compared to expectations, one has to be hopeful that the jobless recovery is finally giving away to a healthy and sustainable expansion."
In George W. Bush's favour is a lower unemployment rate than the one that dogged his father. As well, the economy, though not producing an abundance of jobs, appears to be recovering quite strongly.
His critics, of course, will point to other statistics: there have been job losses in 26 out of the past 32 months, the worst since 1939, and that 40% of those without work have been pounding the streets for at least 15 weeks. That is the worst record in a decade.
Even since the recession officially ended in November, 2001, some 1.1 million jobs have evaporated. Virtually all of them have been in the still-struggling manufacturing sector.
If there is no immediate rebound in job creation -- and no one is expecting a quick turnaround -- then George W. Bush risks being the first president since Herbert Hoover to finish a term in office with fewer jobs than he started out with.
Still, there really is not much room for Mr. Bush to move. The soaring deficit virtually rules out any future tax cuts. The administration appears to have adopted, at least unofficially, a weak dollar policy to boost U.S. exports and making imports less competitive. So far, it is not working.
The Fed itself has little room to move with its key rate already at a 45-year low of 1%.
Instead, Mr. Bush can only continue to "talk up" the economy, much like the Federal Reserve presidents and governors have been doing over the past two weeks, in the hopes of it becoming a self-fulfilling prophecy.
Many economists are tentatively predicting an uptick in job creation next year. How quickly that comes -- if it comes at all -- is crucial for Mr. Bush. Mr. Cheney says it will not really matter if employment remains one million or two million below what it was four years ago when American voters go to the polls next November.
"Most evidence is that the direction of change is more important than the level," he says. "If job growth is enough to feel different by next fall, then G.W. is in luck."
Perception rather than reality is all that counts in a presidential election. Just ask George senior.
@
