As Republicans gear up to run against President Obama's record for creating private-sector jobs, they may encounter an unexpected glitch: It looks a lot like Ronald Reagan's.
Obama has presided over a loss of 1.6 million of the nation's 111 million private-company jobs since taking office, according to official statistics. But since employment hit post-recession lows in February 2010, companies have added 2.6 million jobs, beating the 2.4 million created between the bottom of the 1982 recession and this point in Reagan's first term. Joblessness then was 9.2%.
The trouble for Obama is that next year's outlook seems nothing like 1984. The U.S. economy added 3.9 million jobs in the last 12 months before Reagan romped to re-election. Moody's Analytics expects the U.S. to add 1.6 million jobs next year, barely enough to move unemployment lower. That makes the president's prospects a toss-up, analysts say.
"When I plug in the data, it comes out exactly 50-50 for the Democrats," said Ray Fair, a Yale economist whose political-prediction model uses economic forecasts to set election odds. When last calculated in July, Fair's model predicted Obama would win 53% of 2012's vote. "It's exactly a tie."
Private employers added 110,000 new jobs in October, the payroll-processing company ADP reported Wednesday. The outlook is for about 120,000 new jobs a month for the next year, said Joel Prakken, chairman of Macroeconomic Advisers, the consulting firm that runs ADP's survey.
GOP candidates have said Obama's policies have frightened businesses out of hiring. On that score, Obama's record so far is better than his predecessor, Republican George W. Bush. By September 2003, Bush had presided over the loss of 3.2 million private-sector jobs.
Obama's persistently high unemployment rate stems from 1 million government-worker cuts since May 2010, including 220,000 education employees. If government employment had remained steady since 2009, unemployment would be 8.7%.
"Obama looks better if you only look at private-sector jobs," said Kevin Hassett, director of economic policy studies at the conservative-leaning American Enterprise Institute. Overall, he said Obama's on pace for the worst jobs record since Herbert Hoover.
That will stay true only if the economy stalls. Obama begins the 12-month run-up to the presidential election 1.9 million jobs behind the 348,000 total jobs (including government workers) lost between Bush's inauguration and the 2004 election, slightly more than economists expect the economy to gain by next fall. Even that understates the business sector job losses under Bush. His performance benefited from big gains in government employment: the economy added 821,000 government jobs during his first term, while recouping 2 million of its January 2001-September 2003 private-sector-job losses before the election.
The comparison to Reagan is more eye-catching, Prakken said. Reagan's 2.4 million new jobs from the bottom of the 1982 recession were achieved in a smaller economy.
On the other hand, Obama inherited an economy halfway through shedding 8.8 million jobs when he took office. It was burdened with much more public and private debt, hamstrung by budget deficits, chaos in a housing sector that led the 1984 recovery and the fact that interest rates are already at historic lows, Prakken added.
"We aren't going to have stimulative fiscal policy, and monetary policy can't get any easier," Prakken said. "1982 was a classic cyclical downturn that ended once inflationary psychology was broken."
Democrats should run against Republicans' unwillingness to jump-start job creation, à la Harry Truman's 1948 campaign against a "do-nothing" GOP Congress, said Jared Bernstein, former economic adviser to Vice President Biden.
Ruy Teixeira, a Democratic political strategist, said that's tougher now because Truman's economy had added 4.2 million private jobs since he took office, on a base of just 35 million.
"It's too bad Obama can't channel that economy," said Teixeira, a fellow at the Center for American Progress. "So he'll have to try to do the next-best thing."
