Jobs report may help Obama in tight election race

WASHINGTON Fri Nov 2, 2012 12:26pm EDT

1 of 2. U.S. President Barack Obama participates in a campaign rally in Hilliard, Ohio, November 2, 2012.

Credit: Reuters/Jason Reed

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WASHINGTON (Reuters) - An encouraging October jobs report may give President Barack Obama an 11th-hour campaign boost, but perhaps more importantly it denies Republican challenger Mitt Romney an opportunity to put an exclamation point on his argument that Obama has failed to turn around the economy.

U.S. employers added 171,000 people to their payrolls last month, significantly higher than the 125,000 figure analysts had expected.

The jobless rate edged up a tenth of a point to 7.9 percent, due to workers surging back into the labor force.

Friday's Labor Department report was more modest than last month's stunning figure that pushed the unemployment rate down to 7.8 percent from 8.1 percent, the lowest since 2009.

That fall was such a boost to Obama ahead of the November 6 election that it spawned some quickly discredited conspiracy theories, including from former General Electric chairman Jack Welch, that the White House had somehow manipulated the job figures for political gain.

This time around, the figure was neither so good nor all that bad, giving Republicans little to work with, although they did stick with the message that this is not what a real recovery looks like.

Romney called the uptick in the unemployment rate a "sad reminder" that the economy continues to struggle, and said that, as president, he would "make real changes that lead to a real recovery."

The White House said data showing hiring increased in October proved that the economy was on the mend, and stressed the need to re-elect Obama next Tuesday.

Analysts said the report would likely help Obama.

"The October report... confirmed a narrative that the economy is expanding moderately," Greg Valliere, chief political strategist at Potomac Research Group, said in a note to clients.

"The Obama camp can't celebrate, because the unemployment rate ticked up to 7.9 percent - but it's difficult to see how the Romney camp can make hay with a report that shows a 171,000 rise in nonfarm payrolls," Valliere said.

PUTTING THE ECONOMY BACK IN THE NEWS

Romney's odds of victory fell - and Obama's odds for re-election rose - on the Intrade prediction market after the jobs report. In early Friday action, traders saw a 32.5 percent chance of Romney winning on Tuesday, down 4.4 percent from Thursday's close.

They put the chances of an Obama victory at 67.6 percent, up 1.5 percent from Thursday.

"This jobs report couldn't have come at a better time for the president," said Jim Kessler, senior vice president for policy at Third Way, a centrist Democratic think tank.

"It continues a streak of mostly good economic news on jobs, housing, retail, and consumer confidence. Public opinion polls have shown an uptick in voter optimism about the economy. This report validates that optimism."

If one candidate had a solid lead, a middling unemployment report might not make a difference this late in the campaign.

But this year, with opinion polls showing a deadlocked race and about 7 percent of voters still undecided, it could tilt the race even if only a fairly small number of people are paying attention.

"This is such a tight race. Everything matters," Republican strategist Ford O'Connell said. "Anything that pushes one or two people out there, that benefits either candidate."

O'Connell said the report would help Romney. It makes the economy a focus of news reports, helping the former private equity executive make his case that he is better equipped than Obama to fix the economy and work with both parties in the U.S. Congress on issues like lowering the budget deficit.

"Americans aren't going to feel better or worse about the economy, but it should help him bolster his closing argument, the idea that it allows him to say 'I have a five-point plan to help America recover faster,'" O'Connell said.

(Editing by Karey Wutkowski and Frances Kerry)

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Comments (7)
hoxfan wrote:
if not for Sandy, the numbers would have been even better. and the uptick to 7.9% only means that many more people have gone back to looking for work. the Republicans totaled our car and then handed the Democrats the keys. our car is almost fixed now. we all just need a little patience.

Nov 02, 2012 12:55pm EDT  --  Report as abuse
texas100 wrote:
Depends on how you read it.. Headline that Reuters refuses to run “Unemployment rate increases to 7.9%” is going to get the big press from more balanced media outfits. I seem to remember when the Unemployment Rate dropped last month to 7.8% that Reutuers trumped that figure all over their front page.. Kind of biased reporting..

By the way 171,000 new jobs was offset by 170,000 new job losses in Oct; so there was no real relief on jobs.. New Layoff announcements have also hit a 6 month high, so we can expect slow/no job growth in the near future..
Just don’t see Obama fixing this..

Nov 02, 2012 1:41pm EDT  --  Report as abuse
USAPragmatist wrote:
@texas100, the 171K number is NET increase in jobs, in other words, jobs created – jobs lost. Therefore your assertion that this number is ‘offset by the 170,000 new job losses in Oct’ is just plain wrong. You are either willfully ignorant of the facts because it does not support your ideology or just plain ignorant.

Nov 02, 2012 2:13pm EDT  --  Report as abuse
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