Image: President Obama © Chip Somodevilla, Getty Images News

The 2012 election has entered the final stage in a dead heat. As the Republicans look to take down President Barack Obama, they're focusing on the piddling economic recovery as proof his policies have failed. It can be summed up in a singular question, oft repeated at the GOP convention in Tampa: Are you better off now than you were four years ago?

Clearly, Mitt Romney's supporters are looking to capitalize on a negative view of the pace of recovery, an unemployment rate still north of 8%, a housing market only beginning to stabilize and households still struggling to reduce accumulated debts at a time of stagnant wage growth.

Fair or not, it's a message that resonates.

According to a CBS News poll last month, 62% believe the country is on the wrong track -- up from 48% in the early days of the Obama administration. Some 42% believe the U.S. economy is headed for a new recession in the next few months. And 39% think their families are worse off today than they were four years ago -- about the same as what we saw in November 2008, when the country voted for hope and change in the midst of the subprime meltdown.

Image: Anthony Mirhaydari - MSN Money

Anthony Mirhaydari

Obama's task, never easy, has been made more difficult by the political gridlock we've seen since Republicans won control of the House in 2010, gumming up any chance of additional fiscal stimulus or meaningful progress on the debt/deficit issue, and resulting in the credit downgrade of the U.S. Treasury last August that shocked market and business confidence.

Instead of taking action on Obama's jobs plan or looking at issues with bipartisan support (such as tax reform), Washington has descended into political blood sport where everyone plays for keeps and no one crosses the aisle. Things are likely to get worse as we barrel toward a "fiscal cliff" of tax hikes and spending cuts worth nearly 5% of the gross domestic product as the calendar flips to 2013. (Read "Countdown to the fiscal cliff.")

But before then, we've got an election to decide. And that means voters need to answer the critical question: Are we better off since Obama took office? Here's a look, by the numbers, at the past four years in the four areas that matter most: economic growth, jobs, income and wealth.

The overall takeaway: The economy has improved, but it's far from great for many Americans. Voters will have to decide whether that's good enough to elect Obama to a second term.


When Obama took office, the economy was shrinking at roughly 8% annually. For most of Obama's term, it's been growing, as the chart below shows. In absolute terms, the economy is now $853 billion larger than it was before Obama was inaugurated. So, yes, we're better off.

But if you're a little disappointed, you're not alone.

Coming out of the worst financial crisis since the Great Depression, ending a 20-year dependence on credit-fueled growth and in the wake of a delayed response to the crisis by the administration of then-President George W. Bush, the recovery was always going to be fitful. So it's no surprise that, 18 quarters after the pre-recession peak in GDP activity, the economy has managed to grow only 1.8% over the pre-recession high.

According to Credit Suisse economists, that's far from where we should be if this had been a normal recession -- the kind people have experienced before. On average, 18 months into a mild recession, GDP should be 10.4% larger than it is now. For a severe recession, it should be nearly 14% larger. That's almost $2 trillion in lost output, lost wages and lost prosperity.

Real GDP


When Obama took office, the economy was losing nearly 820,000 jobs a month. The losses stopped in December 2009, and since then, the economy has created more than 4.1 million jobs.

But we haven't fully recovered. Philippa Dunne of The Liscio Report notes that we're still 4.7 million jobs below the pre-recession peak, as the chart below shows. At the rate we're creating jobs right now, it would take four years to regain those levels -- not even accounting for population growth.

Total nonfarm jobs © MSN Money

Source: Federal Reseve

What's worse is that the job-growth rate has stalled. Nonfarm payrolls added 96,000 jobs in August, the fifth sub-100,000 gain in the past six months and an average gain of 205,000 per month for the previous six months. The unemployment rate fell to 8.1%, thanks to an estimated 386,000 workers who gave up and left the labor force. As a result, the labor force participation rate is at its lowest level since 1981.

Not a good sign.