Weak US economy drags down Obama momentum

Friday, 3 June 2011 00:03 -     - {{hitsCtrl.values.hits}}

WASHINGTON, (AFP) - A clutch of disheartening economic data is threatening to squelch President Barack Obama’s “bin Laden bounce” and highlight his political vulnerabilities as he fires up his 2012 reelection bid.

Barring a sharp turnaround, Obama risks entering election year with the unemployment rate -- currently 9.0 percent -- still high, with millions out of work and millions more struggling to make ends meet.

That is a dangerous scenario for any president, as American voters show in election after election that the economy and jobs are their top concern.

Just a week ago Obama was basking in a feel-good tour of Europe, enjoying a small opinion poll boost following the daring US special forces raid which killed Al-Qaeda chief Osama bin Laden.

But now -- though long-term trends are positive -- monthly data on a moribund housing market, sluggish job creation, manufacturing and growth are feeding worries that the US recovery may be more fragile than first thought.

The White House had hoped by now to have laid to rest the question of whether frail economic growth would deprive Obama of the second term that successful presidencies require.

“Had the economy been showing more dramatic signs of improvement, the 2012 race may have been a fait accompli,” said Professor Costas Panagopoulos, an elections specialist at Fordham University.

“At this point, given the lackluster performance of the economy, and indications that things have not improved as dramatically as the public may have wanted them to improve, 2012 remains a real race.”In short, after steering the American economy out of the worst recession since the 1930s, Obama cannot yet confidently ask voters the key question: “Are you better off now than you were four years ago?”Two of Obama’s predecessors -- presidents Jimmy Carter and George H.W. Bush -- also found that question difficult, and each lost after a single term.

A report by payroll firm ADP on Wednesday found private sector jobs rose by only 38,000 in May, and other data showed the growth in US manufacturing slumped seven percent in the same month.

The economy meanwhile grew at a modest pace in the first quarter of 2011, at an annual rate of 1.8 percent -- below expectations -- following a 2010 fourth quarter expansion of 3.1 percent.

Analysts are also cutting expectations for new government employment figures on Friday, predicting between 80,000 and 175,000 jobs were created last month -- down from 268,000 in April.

The White House prefers not to dwell on individual sets of economic data, pointing out instead that the economy has added three-quarters of a million private sector jobs in the last three months.

“We’re obviously still in a situation where we’re emerging from the worst recession since the Great Depression,” said Obama spokesman Jay Carney.

“There’s a lot of positive indicators, including the sustained period of economic growth that we’ve seen.”Deprived of a strong rebound, Obama is stuck with a narrative that did not thwart a Republican rout in mid-term congressional elections in 2010.

In campaign stops he still talks of a “recession so severe that families all across America are still feeling the aftershock,” and says he staved off a second Great Depression.

But claiming credit for preventing a disaster that did not happen is a tough political case to make.

So the White House is highlighting Obama’s efforts to save the US auto industry from extinction with a risky bailout, which the president will celebrate with a visit to a Chrysler plant in swing-state Ohio on Friday.

America’s “Big Three” auto giants are now thriving again, taking back workers and churning out new efficient models, and the White House wants to make sure Obama gets the credit. While much has been written about the frailties of Obama’s potential Republican opponents, a still-weak economy would offer perhaps the only strong strategy for beating the president in November 2012.

Already, potential Republican nominees are on the case.

“He’s been one of the most ineffective presidents at the job at hand that I’ve ever seen,” Mitt Romney, one possible Republican front-runner told NBC.

“The number-one issue he faced walking in the door was an economy that was in fast decline. He didn’t cause that, but he made things worse.”While Obama bests Republican foes in matchup polls, his ratings on the economy are grim -- a CBS poll last month found only 40 percent of Americans approve of how he is doing.

So far however, there is little compelling evidence to suggest voters think Republicans can do better.