It’s Still The Economy, Stupid.

by Stuart Shapiro

As we head into the next election cycle, much ink (including mine) will be spent on the Republican primaries, the battle over the budget, and death panels (and other media creations).  However, one factor will dominate all others in determining the reelection chances of President Obama.  A colleague of mine sees mixed signals on the economy going into 2011 but is generally positive.

In 2010, the labor market turned the corner:

• Private sector job creation occurred in every month.

• Growth in temp employment, a precursor to full-time job creation occurred in every month except one.

• Increases in hours worked, also a precursor to full-time job creation occurred.

• Retail sales during the Holiday season are up from the previous year!

In 2011, with the second stimulus’ help, the labor market will accelerate out of the turn.
If this is right, then the president will be a prohibitive favorite for reelection.  Here’s hoping!

By: Stuart Shapiro

Stuart is a professor and the Director of the Public Policy
program at the Bloustein School of Planning and Public Policy at Rutgers
University. He teaches economics and cost-benefit analysis and studies
regulation in the United States at both the federal and state levels.
Prior to coming to Rutgers, Stuart worked for five years at the Office
of Management and Budget in Washington under Presidents Clinton and
George W. Bush.