Business

Why US unemployment matters in the US election

President Obama with "A Plan for Jobs" leaflet
Image caption Unemployment remains a problem, but it is not clear whether or not it is President Obama's fault.

For President Barack Obama there is good and bad news in these latest jobs figures, which shows that the US economy added 171,000 new jobs in October.

He can breathe a sigh of relief that, when Americans vote next week, there are more of them with jobs than when he took office.

So his challenger Mitt Romney can no longer accuse him of presiding over a net loss of jobs.

It would not have been the first time that has happened.

Back in 2004, President George W Bush won an election despite a net decline in employment between inauguration and polling day. Indeed the data eventually showed a small fall for the whole of his first term.

Mr Obama can also take some comfort from the rather strong figure for job creation in October.

The US population is growing so it constantly needs some new jobs just to stop the labour market getting worse.

There are a range of estimates for what is needed, but the October figure of 171,000 is better than just about all of them.

Hidden unemployment

There is, however, plenty in the new data to emphasise the picture of a labour market that remains weak.

The unemployment rate rose, to 7.9%, which is higher than it was when Mr Obama took over at the White House.

It is possible for both jobs and unemployment to rise because the population has grown.

Image caption Mitt Romney can no longer accuse President Obama of presiding over a net loss of jobs

One key figure is the percentage of the working age population who are in work. That has fallen under the current president, from 60.6% in January 2009 to 58.8%.

There is another important group in the population - people who want to work, but are not included in the unemployment figures, because for example they are not actively looking.

This group has increased by nearly a million in the same period.

Mixed picture

The past four years have also seen a disturbing rise in the number of long-term unemployed, usually defined as six months or longer.

At the depths of the recession, it was more than double the number that Mr Obama inherited.

Even now the figure is over five million and it rose in the latest report.

Long-term unemployment is seen as a particular problem because as time elapses it can become increasingly difficult to get back into work.

People's skills may become out of date and prospective employers may have concerns, possibly unjustified, about their motivation.

The general picture of the labour market under President Obama is this: it got worse in the early stages - when unemployment went as high as 10% - but has improved since then, and now seems to be moving in the right direction.

Nonetheless, it is no better than when President Obama took the reins.

Setting out the key figures about the US employment situation still leaves another vital political question.

Who is at fault for the lacklustre state of the US labour market?

Was it due to a recession that was already in full swing when President Obama took over, or did his policies aggravate the situation?

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