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Unemployment Below 8 Percent, But No Election Game Changer

News this morning that the unemployment rate fell to 7.8 percent is welcome. As we’ve been observing at Via Meadia, the United States is not only in better shape than other developed economies, there are some powerful trends—onshoring, foreign investment, the new energy revolution—pointing toward a more prosperous future than many pessimists assume.

The White House will welcome the drop in the headline rate below 8 percent, though the GOP will be harping on the relatively small number of jobs actually created and the large number of people working part time. Over the past month, a rise in economic confidence (especially among Democrats) contributed to the President’s strength in the polls, and the slowly improving economy undoubtedly makes life easier for an incumbent seeking re-election. There will be lots of politically driven bickering over the various dimensions of the report, but the dramatic fall in the headline number will have the biggest impact on public opinion.

That said, these numbers don’t substantially change the dynamics of the contest. Our current slow growth is enough to keep the President in the game, but not good enough to work strongly in his favor. The President has had a small but significant lead in the polls for most of the year, and while that can be overcome, Governor Romney has to win the White House—it won’t fall into his lap. The President isn’t cruising toward re-election, especially after his strangely passive debate performance, but he is still favored by the odds-makers to win.

The jobs report doesn’t change any of that. No news is good news for Democrats, at least for today.

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