A surge in hiring points to a real recovery

What happened

A surprisingly strong month of hiring by private businesses sparked hopes this week that the U.S. economic recovery was now shifting into a higher gear, sending stock prices soaring and giving a big boost to President Obama’s re-election campaign. The Labor Department’s jobs report for January showed that employers added a net of 243,000 jobs—the largest gain in nine months. The unemployment rate fell to 8.3 percent, down from a high of 10 percent in 2009. Job gains for previous months were also revised up, from 200,000 to 203,000 in December, and from 100,000 to 157,000 in November. President Obama said that the report proved his administration had turned the economy around. “I deserve a second term, but we’re not done,” he said. “[In 2009] we were losing 750,000 jobs a month. Now we’re creating 250,000.” All told, the economy has generated 3.7 million new jobs since the recovery began, 23 months ago.

But other indicators pointed to continued, long-term problems in the labor market. More than 40 percent of the unemployed, around 5.5 million people, have been out of work for six months or more. And at least 8.2 million people are working part-time because they cannot find full-time jobs. Mitt Romney, the front-runner for the GOP’s presidential nomination, said the current recovery was a cyclical inevitability, but that Obama’s policies “have slowed down the recovery, made it more difficult.”

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What the editorials said

“That’s more like it,” said the New York Daily News. For the first time in years, the recovery is truly picking up momentum, and all sectors of the economy are sharing in the gains. Manufacturing hires were up 50,000; leisure and hospitality rose by 44,000 and business services by 70,000. Of course, there’s still plenty to worry about. “The housing market is sick unto death,” and the deficit is soaring. “So: It’s an uphill climb.” But at least we’re headed in the right direction.

Hold the celebration, said The Wall Street Journal. This is still “by far the worst jobs recovery since the Great Depression.” The U.S. still has 5.5 million fewer jobs than when the recession began, in December 2007. And yet Obama thinks the answer to the nation’s problems is “to raise taxes on job creators,’’ said the New York Post. Such foolishness will only add to the 47 million Americans now on food stamps—an all-time high.

What the columnists said

Do you hear the champagne corks popping in the West Wing? said John Cassidy in NewYorker.com. If the economy adds between 180,000 and 250,000 jobs every month between now and the election, the jobless rate will fall below 8 percent—about where it stood when Obama took office. At that point, Romney’s “entire case for election’’ crumbles. Still, Romney has no choice but to run on “economic pessimism,’’ said Jonathan Chait in NYMag​.com. Obama’s foreign policy has been very successful, and polls show that Obama is personally popular, while Romney and the Republican Party are very unpopular. If the economy keeps improving, the election is Obama’s to lose.

History suggests otherwise, said Janet Hook in The Wall Street Journal. Since 1960, four presidents have run for re-election with a jobless rate higher than 7 percent. Only Ronald Reagan won, and that’s because in 1984 the economy was growing at a “superfast’’ rate of more than 8 percent, while unemployment fell steeply. Today, it’s growing at an anemic 3 percent, and unemployment is likely to remain above 8 percent in November. That would put the president firmly in the danger zone.

And a continued recovery is not at all guaranteed, said Derek Thompson in TheAtlantic.com. If Europe falls apart or war breaks out with Iran, sending oil prices skyrocketing, the negative impact could be severe. Another partisan battle over extending the payroll tax for the rest of 2012—a distinct possibility—could also shake consumer confidence. Still, if the “electeds in Washington avoid drawing too much attention to themselves,” this recovery could be a keeper.