Moody’s Zandi: Economy on Election Day Will Look Just Like TodayTuesday, 17 Jul 2012 08:10 AM The economy on election day won't improve much from today, with unemployment rates remaining more or less where they are today, says Mark Zandi, chief economist at Moody's Analytics. "The economy on Election Day will feel pretty much like it feels today," Mark Zandi, chief economist of Moody's Analytics, said recently on CBS's "Face the Nation." "The benchmark is the unemployment rate, and the unemployment rate today is 8.2 percent nationwide. If you told me it's 8 percent on election day, I'd say that sounds about right." Unemployment rates have been falling in swing states, however. "In Ohio, it's closer to 7 [percent], Virginia is closer to five and New Hampshire is closer to five percent, unemployment is 8 percent in Florida, so in some of the key swing states, the economy is doing a bit better." While the economy continues to improve, unemployment rates have remained high since recovery from the downturn officially began in 2009. For many households, however, high unemployment rates make it feel like the country remains mired in the recession, which hampers recovery. "They feel the numbers. They sense that the economy isn't fully engaged," Zandi says, adding the economy created an average 75,000 jobs during the last three months, which isn't enough to instill confidence in the country and is too low to fuel more sustained economic recovery. "They know we are growing but that doesn't feel very good and that's certainly not enough to get the unemployment rate down." Other experts point out that unemployment rates should be higher, in that those who are out of work and aren't actively looking for jobs aren't counted as part of the labor force. Factor those workers back in, and the unemployment rate would jump a lot higher. "These numbers aren't even enough to keep track of population growth. If you look at what's happened to the participation rate — that's the number of people who consider themselves part of the labor force — that participation rate under Obama has dropped from a little bit over 66 percent down to a little bit below 64 percent," says economist Arthur B. Laffer, an architect of Ronald Reagan's economic policies, according to Fox Business Network. "If you added those people in, those who have left the labor force, you've got an unemployment rate right now of a little over 12 percent. This is intolerable. This is the just worst economic period I have seen in my life and I lived through Jimmy Carter." © 2012 Moneynews. All rights reserved. http://www.moneynews.com |