BOOM! That is the sound of the announcement that the unemployment in September was 7.8% (down from 8.1% in August), which is the lowest level of unemployment since President Obama took office. Will this change the dynamics of the election in November?
For the last several years, Obama has lived with unemployment at levels higher than when he came into office. Of course he came into office during a downturn, so that is to be expected to a certain extent, but most would have hoped that he would be able to turn the economy around much faster. Unfortunately, the downturn in the economy was much worse than anything we have experienced since the Great Depression. Don't be fooled by those that claim that things were even worse off when Reagan came into office in the 1980s. They were bad back then, but we had tools to tackle a lot of the problems we had like high inflation. In addition, the credit market didn't just survive a near-death experience when Reagan took office. They had in the most recent crisis.
With that said, 7.8% isn't anything to celebrate. It is still extremely high. The key here though is that 7.8% is the lowest level of unemployment since Obama took office. This is Obama's October surprise, and it couldn't have come at a better time. With everyone talking about how poorly Obama's performance was at the first presidential debate, this news is sure to erase coverage on that topic for the next several weeks until the next debate.
Before it's said, I understand that less people are working today than when Obama took office. The labor force participation rate has dropped substantially which is where that fact comes from. I just don't believe a drop in the labor force participation rate is as bad of a thing that many claim it is. One of the best times in modern United States history, the Golden Age of Capitalism, happened during a time period where the labor force participation rate was even lower than it is today. With that in mind, it is not unreasonable to believe that a lower labor force participation rate does not mean we're doomed!
Will this change the dynamics of the race? Will Mitt Romney's debate performance momentum be sustainable even with this news breaking story? What do you think?