The last jobs report before the 2012 elections has given President Obama a modest tailwind. Our Obamanometer reading is close to the highest level it's been at since we started tracking the economy's impact on the race in mid-September.
The Obamanometer seesawed between Obama and Romney territory for much of late September and early October. But since then, it has increasingly favored Obama, with the latest jobs report likely to anchor the needle on Obama's side during the last few days of the campaign. The report showed that the economy added 171,000 new jobs in October, for a total of about 1.9 million new jobs so far in 2012.
Like mostly everything else in the economy, that's subpar, but going in the right direction. Meanwhile, the unemployment rate for October drifted upward a notch, to 7.9 percent. But that's largely because more people are starting to look for work, and getting counted as unemployed before they actually find a job—a typical trend during a recovery.
Most of the inputs that determine our Obamanometer reading have been following the same trend: They're not good enough, but at least they're getting better. Gas prices, now around $3.50 per gallon on average, have fallen nearly 30 cents over the past month, according to AAA. The stock market has yo-yoed lately, but it still up nearly 14 percent for the year. Most indicators show the housing market is finally improving. Consumers are growing more confident and some economists are beginning to predict a buoyant holiday season. The only consistently negative metric this fall has been inflation, and that is likely to moderate as gas prices come down and the spike in food prices caused by the summer drought abates.
The bottom line is that Obama can plausibly claim the economy is improving. And Republican challenger Mitt Romney can plausibly claim that it's happening too slowly. If those few key undecided voters have been looking for a strong swing one way or the other to help them sort out whom to vote for, they're not going to get it by Election Day. Like the election itself, the strength of the recovery remains too close to call.
Rick Newman is the author of Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman
Methodology: The Obamanometer measures 22 economic metrics in 11 broad categories: the S&P 500 stock index, the price of gas, the employment situation, other job indicators, consumer confidence, leading economic indicators, inflation, housing, personal income, consumer spending, and the risk of recession as calculated by Moody's Analytics. The S&P 500 index and gas prices are updated daily, based on the level of change from one week prior. Other indicators are updated weekly or monthly as they come out. Changes are coded on a seven-point scale ranging from -3 to +3, with -3 representing a strongly negative economic development that favors Romney, and +3 indicating a strongly positive development that favors Obama. A score of 0 indicates no meaningful change. The individual scores are averaged each day on a weighted basis. The S&P 500 index, gas prices and the employment situation are weighted to represent one-half of the index value, since those are the most highly visible economic indicators. The other metrics represent the other half of the index value. Each day's overall Obamanometer reading ranges somewhere between -3 and +3. In visual terms, an overall reading of -3 would be represented by the needle pointing all the way to the left, while +3 would be represented by the needle pointing all the way to the right. If the overall reading were 0, the needle would point straight up.