Posted 9:30pm November 13
by Ilana Weinberg
U-WIRE Washington Bureau
The American economy has taken a large step towards recovery over the past month, as 126,000 new jobs were added, according to a report released last week by the U.S. Department of Labor.
The unemployment rate fell from 6.1 to six percent in October, which has shown a significant turn around since the economic recession began in 2001. However, it is still a far cry from making up for the 2.4 million jobs that have been lost in the interim.
The Labor Department report has left economists hopeful that the recent job drought is finally coming to an end. Not only has there been an improvement larger than expected in October, but the economy has added 286,000 jobs in the past three months. These gains followed job losses that have averaged 85,000 a month since January.
“Things are beginning to brighten up for people looking for work,” said President Bush at a job training initiative in North Carolina on Friday.
“Weekly claims for unemployment benefits have continued to fall and other economic indicators show that we are experiencing the strongest economic growth in nearly 20 years,” said Labor Secretary Elaine L. Chao in a statement last week.
The decline in unemployment has come at an opportune time, boosting American morale just in time for the consumer driven Christmas season, according to economists. Job and income growth will in turn lead to the growth of consumer spending.
“Still, as the President has said, we are optimistic, but not complacent. We will not rest until every American who wants a job can find one,” said Chao.
The White House was quick to take credit for the boost in the economy’s performance last month, turning it into a key issue for the upcoming Presidential election.
“The problem is who gets credit. The Republicans want credit and will gamble on the future getting better. The Democrats will focus on how bad it is now, and say that ‘this will not be sustainable unless you elect me’,” said Eugene Muscat, Professor of Management and Associate Dean at the University of San Francisco Business School.
The recent gubernatorial race in California has served as a sneak preview for the upcoming 2004 campaign race. The failing economy was a key factor in recalling Governor Gray Davis, and the presidential election will likely mirror it.
“Presidential candidates are going to very much imitate the California gubernatorial campaign prayer book. [The 2004] election will show more partnerships with governors,” said Muscat.
The Schwarzenegger campaign in California was completely optimistic. It relied on looking towards a future of economic recovery. “You’ve got to be a cheerleader, got to pump things up,” said Muscat.
The re-election hopes of the Bush administration depend heavily on the perception of this economic recovery. Unlike the California election, it will not be an easy task for the divided Democratic Party to promise a stronger economic future. This was a major focal point of the Democratic campaign that candidates no longer have to fall back on.
“Clearly, the dilemma is the Democratic factions are going to have to focus on the pessimism to keep the current administration for getting credit for the improvement,” said Muscat.
