US unemployment fell in January to a rate last seen just after President Barack Obama entered office three years ago, but as the economy looms as the central issue of the 2012 presidential election, Republicans wasted no time in pummelling him. Government figures on Friday showed unemployment fell to 8.3 per cent - the same level as February 2009, a month after Obama took office.
The jobless rate peaked at 10 per cent in October 2009. A string of positive economic data could help Obama's reelection bid in November, with growth up in the fourth quarter of 2011. Since World War II, though, only one US president has been returned to office with the unemployment rate above 6 per cent. Ronald Reagan won in 1984 amid a jobless rate of 7.2 per cent, but with a roaring economy that had seen unemployment fall from 10.2 per cent just 18 months earlier.
"I know the president didn't cause this downturn, this recession, but he didn't make it better, he made it worse," Republican presidential frontrunner Mitt Romney told a campaign rally in the south-western state of Nevada, which has been among the hardest hit by the economic downturn.
His campaign pointed to economic growth in 2011 of just 1.7 per cent, down from 3 per cent in 2010, even as fourth-quarter growth set a faster pace of 2.8 per cent. "We welcome the fact that jobs were created and unemployment declined," Romney said Friday. "Unfortunately, these numbers cannot hide the fact that President Obama's policies have prevented a true economic recovery. We can do better."
Another Republican presidential candidate, Newt Gingrich, said that if the unemployment rate continues to improve before November, Obama was likely to benefit politically. "If this is a lull before it starts getting worse, his re-election will be in enormous trouble," Gingrich said. "The most he'll be able to say is, 'I'm less destructive than I was a year ago.'"
Last week, the US Federal Reserve predicted an unemployment rate of 8.2-8.5 per cent for the year, an improvement over the 8.5-8.7 per cent in its November projections for 2012. But the central bank, which said it was likely to keep interest rates near zero through 2014 to bolster the economy, lowered its economic growth projections for the year, anticipating gross domestic product growth of 2.2-2.7 per cent, down from estimates of 2.5-2.9 per cent in November.
Obama himself was cautiously optimistic. "The unemployment rate came down because more people found work," he said Friday in a Washington suburb, at an event advocating the hiring of veterans. "Now, these numbers will go up and down in the coming months, and there's still far too many Americans who need a job, or need a job that pays better than the one they have now," he said. "But the economy is growing stronger. The recovery is speeding up. And we've got to do everything in our power to keep it going."
Obama pointed to 3.7 million jobs added over the last two years, but critics noted that is far fewer than were lost in the recession, and that 12.8 million Americans remain unemployed - and many of those have been out of work for long periods of time. The conservative American Enterprise Institute think tank said the unemployment figure did not accurately reflect the labour market, because fewer people were actively looking for work, and estimated that the figure would stand at 11 per cent if they were included.
Congressional Republicans were quick to say more needed to be done. "We can't be satisfied with an unemployment rate mired above 8 per cent for years on end," Speaker of the House of Representatives John Boehner said. Obama pointed the finger back at Congress, which rejected a jobs bill he put forward last year, leaving him to push a series of smaller measures to stimulate the economy.
In his State of the Union address to Congress last month, Obama said all Americans need to have a more fair shot to succeed in the economy and offered proposals to boost manufacturing and tax the wealthy. On Friday, he took Congress to task for not doing enough.
"We can't go back to the policies that led to the recession," he said. "And we can't let Washington stand in the way of our recovery. We want Washington to be helping with the recovery, not making it tougher." But with lawmakers also facing reelection in the Republican-controlled House, little action on jobs seems likely in the coming months in Washington. Obama may have to rely on the numbers to speak for themselves as he looks for four more years in office.