There have been plenty of articles talking about how the Obama campaign is hoping for a repeat of 2004 (close but successful re- election in a recovering economy) but fears a repeat of 1992 (referendum on the incumbent over too slow of recovery). Today’s jobs report from the Bureau of Labor Statistics paints a very gloomy jobs picture in an all-too-slow recovery.
(...) Within the context of Presidential politics, it is curious to see where Obama rates within the two campaigns this cycle has been compared to: 1992 and 2004.
Any one data point, good or bad, can be dismissed as an anomaly but monthly averages and trends tell a much more fair story. The average monthly jobs created this past quarter was 75,000/month. In 1992, the average in the second quarter was 114,000 while the average in the second quarter of 2004 was 213,000.
At the same juncture in each of the comparative election cycles President Obama is dramatically underperforming his peers. What is more troubling for the President is the trend line. Looking at a chart of his year-to-date monthly jobs reports, we see the figures converging downward with 1992 rather than steadily improving (like 2004) or accelerating upward (like 1984).
From this juncture through the election day in 1992 the monthly jobs report averaged 106,000 jobs gained. The great difference between 1992 and today is the Bush 41 economy was steadily improving from weak and negative jobs reports in the first quarter while the Obama economy is steadily declining from reasonable and comparatively better jobs figures in the first quarter. Also, Bush 41′s first quarter GDP was 4.5% in a year of 3.4% GDP growth. President Obama’s first quarter GDP was 1.9%, his second quarter GDP is expected closer to 1.5% and the full-year GDP is expected remain below 2.0%.
The Obama campaign would like to maintain the argument that this election is more similar to 2004 than 1992, but to do so would be to dismiss a great many things. First and foremost, the 2004 election was about national security (remember John Kerry’s convention? Hint: Obama was there). There was little to no discussion about the economy (honestly, does anyone remember a meaningful economic dispute during that campaign?).
Add to the fact that, as shown above, the 2004 jobs picture was dramatically better than the 2012 malaise and you see the Obama hope for a 2004 repeat fades quickly. For the remainder of 2004, the monthly jobs report averaged 169,000 jobs gained. That level of job growth is still weak, mind you, but far surpasses reasonable expectations for the Obama economy.
But jobs aren’t the only difference. In addition to jobs, GDP in the first quarter of 2004 was 2.7% in a year where annual GDP was 3.5%. As discussed above, Obama’s 2012 GDP almost certainly will not exceed 2.0%.
Following all the recent jobs report, the weak manufacturing report earlier this week signalling domestic economic contraction, and the global economic slowdown, a rapid pick-up in jobs into the election driving a repeat of the 2004 election is simply not in the cards. Unfortunately for the campaign in Chicago, more and more of the economy and re-election prospects for President Obama are looking like a repeat of 1992.