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Jump in Jobless Rate Puts Spotlight On Obama

Economists had been predicting for months that the unemployment rate would soon cross the psychologically important 10 percent mark, but few expected it to happen quite so quickly.

U.S. President Barack Obama speaks in the Rose Garden of the White House on being awarded the 2009 Nobel Peace Prize October 9, 2009 in Washington, DC.
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Above: U.S. President Barack Obama speaks in the Rose Garden of the White House on being awarded the 2009 Nobel Peace Prize October 9, 2009 in Washington, DC.

The official confirmation on Friday that unemployment jumped to 10.2 percent last month — hitting double digits for the first time since 1983 — was another blow for an Obama administration already reeling from some high-profile Democratic losses in key election races this week.

Republicans have been celebrating gubernatorial victories in the Democratic-leaning state of New Jersey and the battleground state of Virginia.

The GOP, which has tried to make jobs a central theme of its rhetoric, could be well-poised going into the midterm congressional elections next year, particularly with unemployment projected to remain high.

"In the short run, it's going to be a benefit for Republicans," says Joseph Bafumi, a political scientist at Dartmouth College. "They are probably looking at a midterm election where they can pick up a few seats."

James Campbell, a political scientist at the University at Buffalo, says the Republican gains in 2010 could be substantial — as high as 15 to 20 seats.

"From my research, it looks like President Obama's approval rating would have to be in the mid-60s to expect no losses," says Campbell, who has designed an election forecasting model related to economic conditions. "At this point, he's barely above 50 percent in recent polls, and I'm not sure Democrats could count on his approval ratings being much higher going into next year's midterms."

At the same time, other polling experts caution against overstating the benefits for the GOP at this point.

"Obama's marks are going down on handling the economy, but there is no indication that Republicans' marks are going up," says Karlyn Bowman, who studies public opinion trends at the conservative American Enterprise Institute. "There is not a lot of confidence in Congress, either in Democrats or Republicans, so it's a pox on all their houses."

Bracing For The News

The jobless figure stands in contrast to other economic indicators that suggest the economy is beginning to turn around. Gross domestic product grew in the third quarter for the first time in more than a year, suggesting the deep recession may be ending.

But the new unemployment data are sparking concern that the recovery in jobs may be lagging even further than usual behind the broader economic recovery. The unemployment rate is expected to continue rising into early next year and remain high through most of 2010.

"Psychologically, hitting 10 percent is an important marker, but I'm not sure it is for public opinion, in part because Americans have been so pessimistic about the jobs environment in their own communities for a long time," says Bowman.

President Obama acknowledged Friday that the jobs number was "sobering."

"We have to continue to pursue measures that will create new jobs," he told reporters. "I will not rest until America prospers once again."

The White House had been bracing for this development for a while, and the response last week to news that that the economy had started to grow again was noticeably restrained.

White House economists have credited the stimulus package passed in February with helping to stimulate economic growth, and they point out that its effects will continue to boost the economy well into next year.

Impact On Health Care Vote?

The job news could also complicate Obama's agenda for a massive health care overhaul, which faces a historic vote in the House this weekend.

"It has the effect of crowding out health care as a public concern," says Campbell. "The public's focus is very much on the economy."

Republicans have long been blasting the Obama administration for its spending plans — including its health care proposals.

"More debt, more spending clearly has not worked — particularly in a time of double-digit unemployment," Senate GOP leader Mitch McConnell of Kentucky said on Friday.

Still, experts cautioned that it is important not to read too much into the jobless numbers when it comes to Obama's own chances at re-election in 2012.

"Democrats will probably win the White House in 2012, with Obama at the head of the ticket, because the economy will probably be in a job-full recovery rather than a jobless recovery," says Bafumi.

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