The bad news in today's US jobs figures

Only 58.1 per cent of the US population is in work, the lowest level since 1983.

The latest US job figures may have been better than expected but they're still far from encouraging. 117,000 new jobs were created in July but the unemployment rate was little changed at 9.1 per cent (down from 9.2 per cent in June) and even this fall can be largely attributed to the fact that more people have simply dropped out of the labour market. Perhaps the most sobering statistic, as the New York Times notes, is that only 58.1 per cent of the US adult population is in work, the lowest level since 1983. Little wonder that the "relief" provided by the figures was decidedly temporary.

All of which doesn't bode well for Obama's re-election chances. No US president since Roosevelt in the 1930s has won re-election with the unemployment rate above 7.2 per cent, and it is estimated that by November 2012 it will be 7.8 per cent. So, how worried should Obama be? It all depends on context. FDR was able to win a second term because unemployment was falling, not rising. When he ran for re-election in 1936, unemployment stood at 17 per cent but this was still down from 22 per cent in 1934 and 25 per cent in 1932. The public were satisfied because the figures were moving in the right direction. Similarly, as the NYT has previously noted: "Ronald Reagan won, despite 7.2 percent unemployment in November 1984, because the rate was falling and voters decided he was fixing the problem."

Thus, Obama's challenge is to reduce unemployment to a level that voters, given the global economic context, are willing to tolerate. The Roosevelt precedent suggests that this could be significantly higher than 7.2 per cent and, in the absence of a credible Republican candidate, the smart money is still on Obama celebrating his 54th birthday in the White House.

George Eaton is political editor of the New Statesman.

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Why relations between Theresa May and Philip Hammond became tense so quickly

The political imperative of controlling immigration is clashing with the economic imperative of maintaining growth. 

There is no relationship in government more important than that between the prime minister and the chancellor. When Theresa May entered No.10, she chose Philip Hammond, a dependable technocrat and long-standing ally who she had known since Oxford University. 

But relations between the pair have proved far tenser than anticipated. On Wednesday, Hammond suggested that students could be excluded from the net migration target. "We are having conversations within government about the most appropriate way to record and address net migration," he told the Treasury select committee. The Chancellor, in common with many others, has long regarded the inclusion of students as an obstacle to growth. 

The following day Hammond was publicly rebuked by No.10. "Our position on who is included in the figures has not changed, and we are categorically not reviewing whether or not students are included," a spokesman said (as I reported in advance, May believes that the public would see this move as "a fix"). 

This is not the only clash in May's first 100 days. Hammond was aggrieved by the Prime Minister's criticisms of loose monetary policy (which forced No.10 to state that it "respects the independence of the Bank of England") and is resisting tougher controls on foreign takeovers. The Chancellor has also struck a more sceptical tone on the UK's economic prospects. "It is clear to me that the British people did not vote on June 23 to become poorer," he declared in his conference speech, a signal that national prosperity must come before control of immigration. 

May and Hammond's relationship was never going to match the remarkable bond between David Cameron and George Osborne. But should relations worsen it risks becoming closer to that beween Gordon Brown and Alistair Darling. Like Hammond, Darling entered the Treasury as a calm technocrat and an ally of the PM. But the extraordinary circumstances of the financial crisis transformed him into a far more assertive figure.

In times of turmoil, there is an inevitable clash between political and economic priorities. As prime minister, Brown resisted talk of cuts for fear of the electoral consequences. But as chancellor, Darling was more concerned with the bottom line (backing a rise in VAT). By analogy, May is focused on the political imperative of controlling immigration, while Hammond is focused on the economic imperative of maintaining growth. If their relationship is to endure far tougher times they will soon need to find a middle way. 

George Eaton is political editor of the New Statesman.