Today's release of the change in non-farm payrolls for the month of July showed that after seasonal adjustments, the US economy created 163K jobs. After adjusting for changes in the size of the workforce since 1939, July's increase of 163K was 40K less than the historical monthly average, but it was still enough for stocks to rally by nearly 2% as of mid-day Friday.
So how will July's increase of 163K jobs impact President Obama's prospects for November? The chart below shows the monthly change in non-farm payrolls since January 2009 when President Obama was inaugurated. As shown in the chart, there have been a total of 1.134 million jobs lost since Obama was inaugurated. This number, however, is somewhat misleading as you can't pin all of the big declines during his first few months on Obama. Some of Obama's staunchest supporters will go so far as to say you should only look at the period since the economy first started creating jobs (March 2010) as Obama's impact on employment. Based on this line of reasoning (or lack thereof), Obama has created 4.001 million jobs.
President Obama's biggest detractors, on the other hand, argue that you have to look at Obama's entire tenure in office and count everything. Based on this line of reasoning (or once again lack thereof), the US economy has lost 1.134 million jobs under President Obama. While both sides will go back and forth and never come to an agreement, the reality falls somewhere in the middle.
As we head into November, rather than focusing on what happened a few years ago, Americans will be looking at the current state of employment, so the recent trend in jobs growth will have a bigger impact on President Obama's prospects. While July's increase of 163K was certainly welcomed by investors today, it still remains below the historical average. That and an 8.3% unemployment rate means that the current employment situation is still quite a ways from the point at which the Obama Administration can consider it an asset.
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