Jobs report gives Obama a last-minute lift

But like the presidential race itself, the strength of the recovery remains too close to call.

By MSNMoney partner Nov 2, 2012 11:45AM
By Rick Newman

The last jobs report before the 2012 elections has given President Barack 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 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 jobs in October, for a total of about 1.9 million 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 are 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 yoyoed lately, but it's still up nearly 14% for the year. Most indicators show housing finally improving. Consumers are growing more confident, and some economists are beginning to predict buoyant holidays. 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.

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