Mar 07 2008
The February jobs report released this morning shows a decrease of 63,000 jobs for the month. This is the largest single-month decline in about 5 years. To make matters worse, the 82,000 gain reported for December was revised down to 41,000; and the loss of 17,000 jobs in January was revised to a worse loss of 22,000.
How effective was the Bush administration in dealing with the worsening job problem? Well, they tried:
One bright spot was that the government added 38,000 jobs in February on top of 4,000 new-hires in January.
The right-wing “less government” screamers will be thrilled with that, won’t they?
The mortgage crisis is affecting more aspects of the economy than just housing. The resulting credit crunch will hinder businesses of all sizes from expanding, which means less new jobs being added. And if the uncertainty starts prompting job layoffs, which the February report shows is happening, the layoffs can snowball very quickly as businesses react to each other’s downturns. By contrast, job increases tend to ramp up slowly when a recovery begins. If a business laid off 100 workers in an economic slowdown, they generally don’t hire all 100 back immediately when they start to recover.
The economy is becoming a bigger campaign issue every day. States like Ohio, where the economy was already a big issue, is expected to be a harbinger of the crucial Pennsylvania campaign. Voters faced with job uncertainty, ballooning mortgage payments, and $4.00/gallon gas are going to be in a foul mood. Obama and Clinton will both face constant questions about NAFTA, gas prices, unemployment, and the mortgage crisis. Their answers on these questions will be just as important as questions about the Iraq war and health care.
It should be no surprise that the economy could be the biggest issue in the general election. John McCain’s argument that security is the main reason for choosing a president will ring quite hollow to an electorate that risks losing their houses and jobs. The economic pain felt by voters is real and is growing. Undecided voters for the general election have had plenty of time to form opinions about the candidate’s views on the Iraq war, security, health care, taxes, and global warming. The determining factor to sway undecided voters could be how the candidates respond to the growing economic crisis.