There’s a lot of talk today about the good jobs news as good news for the Obama re-election campaign, but while obviously good numbers are better than bad numbers I do think that may be a bit too much of a hasty inference. The “bad economy” and its negative consequences for the incumbent has never taken the form of the median voter being unemployed, and it’s also never been the case that the typical voted-for-Obama-and-now-don’t-like-him person was an unemployed person. It’s perfectly possible to imagine a situation in which the economy keeps adding jobs over the course of 2012 but wages don’t keep up with inflation. Indeed in some respects falling real wages makes reductions in unemployment more likely. Given recent talk of exports, it’s particularly worth noting that what a rise in net exports means by definition is that people are working harder and not getting a proportionate amount of stuff in return.
More broadly, we added a lot of jobs in the fourth quarter of 2011, but the GDP number wasn’t very impressive and Q3 of 2011 was terrible. It’s possible that Q4 figure will be revised upward and it’s possible that Q1 and Q2 of 2012 will look much better than the previous two quarters, but those overall growth and wage indicators are what I’d be looking at in terms of reading the political tea leaves. Joblessness is a powerful symbol of macroeconomic failure, but the typical American worker is an employed person who wants to see his real income rise. The fate of his pocketbook is related to, but by no means identitical to, the question of job growth for the unemployed.