AP: Unemployment Will Be '7.9 Percent By Election Day' Boosting 'Obama's Prospects'

There's been a lot of bad economic news lately, but the folks at the Associated Press don't care.

In their view - or at least in the opinion of those they surveyed - "[h]iring through the rest of 2012...will be strong enough to push the unemployment rate below 8 percent by Election Day" boosting "Obama's prospects in November":

That's the view that emerges from an Associated Press survey of 32 leading economists who foresee a gradually brighter jobs picture. Despite higher gas prices, Europe's debt crisis and a weak housing market, they think the economy has entered a "virtuous cycle" in which hiring boosts consumer spending, which fuels more hiring and spending.

The survey results come before a report Friday on hiring during April. The April report is eagerly awaited because employers added surprisingly few jobs in March. That result contributed to fears that the economy might struggle to sustain its recovery.

But the economists think the recovery will manage to reduce unemployment to 7.9 percent by Election Day from 8.2 percent in March.

Falling unemployment would boost President Barack Obama's prospects in November.

This seems a very bold prediction given the very disappointing unemployment numbers in March when employers added a meager 120,000 employees to payrolls well below expectations.

On Wednesday, payroll processor ADP also released a lousy forecast for April as reported by MarketWatch:

Private-sector employment increased 119,000 in April, the lowest result since September, led by the service-providing sector and small and medium businesses, according to ADP. The April gain is down from average monthly employment increases of about 200,000 in the first quarter of 2012, according to ADP.

“This deceleration seems consistent with other incoming data,” said Joel Prakken, chairman of Macroeconomic Advisers, which produces the report for ADP. “There is some evidence that unusually warm weather boosted employment during the winter months, with a ‘payback’ now coming due.”

Prakken added that the low pace of private-sector growth means it’s unlikely that the national unemployment rate declined, unless there was a substantial contraction in the labor force.  

Who's right?

As the late financial commentator Ed Hart used to say, we'll know in the fullness of time.

Of course, no matter what the economic news is, the folks at AP will figure out a way to spin it positively for the president they adore.

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Noel Sheppard's picture