Analysis: Little hope for struggling Democrats in jobs report

WASHINGTON Thu Oct 7, 2010 1:33pm EDT

WASHINGTON (Reuters) - Another disappointing U.S. jobs report on Friday would make it even harder for President Barack Obama to convince Americans that Democrats deserve to keep control of Congress in next month's elections.

Private economists predict the report -- the last before the November 2 midterm elections -- will show the unemployment rate ticked up to 9.7 percent in September.

Despite some recent good news, including an unexpected drop in jobless claims last week, the economy is not strengthening enough to generate sufficient job growth. It could be too late for the Democrats to prevent big Republican wins next month.

"It takes a number of months of good news to begin to reshape the public's understanding of what the economic situation really is," William Galston of the Brookings Institution said.

"Setting aside the fact that there's no particular reason to expect dramatically good news ... I really don't think it would make that much of a difference this week," he said.

With U.S. unemployment twice as high as before the start of the global financial crisis in August 2007, voters are deeply unhappy about the economy and skeptical about whether Obama's massive spending programs have made a difference, while adding to the budget deficit.

Polls show that they will likely respond by throwing many of Obama's fellow Democrats out of office.

Voters see high unemployment rates as a sign the economy is broken, rather than as part of the natural economic cycle, public opinion soundings like the Reuters Ipsos poll show.

Even Obama acknowledged the difficulty at a Democratic party fundraiser in New Jersey on Wednesday.

"When the unemployment rate is 9.5-9.6 percent, that gives an enormous advantage to whoever is not in power because they can simply point at the status quo, regardless of causation, and say 'you know what -- it's the folks who are in power who are at fault.' So that gives sort of a natural momentum behind their arguments," he said.

Democrats have tried to make the point that the economy would have been far worse without Obama's $814 billion stimulus plan, but polls show the package is unpopular with much of the public and has fallen short of expectations.

Many Americans prefer cutting the deficit to increasing government spending as a way to improve the economy, sentiments that square with Republican rhetoric rather than the views of the economists Democrats cite in support of stimulus.

NO BIG JOBS RELIEF IN SIGHT

Only a sharp reduction in the jobless rate, perhaps to 9.0 percent or even lower, would give the Democrats a boost but such a figure is nowhere in sight.

"If it drops below nine, that might have some psychological effect and the Democrats might be able to make a claim that their spending, stimulus, bailouts and all those other parts of their agenda have worked," said Terry Madonna, a public affairs professor at Franklin & Marshall College in Pennsylvania.

Far from dropping, the jobless number is expected to inch up to 9.7 percent for September from 9.6 percent in August, according to economists polled by Reuters. [ID:nN05187700].

Republicans promise to slash government spending and overturn Obama's healthcare reform if they win the House of Representatives. [ID:nN23174689]

The Republicans could well pick up the 39 seats they would need to claim a 218-seat majority in the House. And they are forecast to gain in the Senate, although they would have to sweep nearly every competitive race -- which is not expected -- to seize the majority of the Senate's 100 seats.

Republicans are also projected to do well in races for state governor.

Some recent signs of hope for Obama's party are not expected to be enough to prevent Republican gains in a year when Democrats only narrowly lead where voters typically favor the party heavily, and are struggling in swing states -- such as Pennsylvania and Florida -- that went for Obama in 2008.

"If you look around the country, it looks like in a few states, heavily Democratic states, they're doing better than they were. In the New York governor's race, in the Connecticut senate race, in the California races, in Washington with (incumbent Senator) Patty Murray, they seem to be doing a little better than they were a month ago," Madonna said.

However, he said, "There's not a lot of evidence in the pivotal states that aren't as heavily Democratic."

A few Democrats have gained enough in recent polls to generate a flicker of hope for the party that Republicans might not secure a majority in the House.

Surveys have also show some erosion in the Republicans' big advantage in voter enthusiasm, as Obama and other Democrats begin to hit the campaign trail hard and with a negative message saying Republican economic policies favor the richest Americans and corporations over the middle class.

Some core Democrats who had not been involved in the mid-terms have become active. The Democratic National Committee raised $16 million in September, its biggest month since 2002.

(Editing by Jerry Norton)

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