By Hastings Wyman –
If the recent spate of good economic news had happened in the early fall, the Democrats would have had some decent bragging rights and the outcomes in a number of key races might have been different. On President Obama’s watch:
The unemployment rate declined, from 7.0 in November a year ago to 5.8 in November of this year, the lowest rate in six years. And some analysts expect that number will continue to decline. In the South, the jobless rate declined vis-à-vis a year ago in 12 of the 13 states (see below).
Gross National Product (GNP) growth for the 3rd Quarter increased 5%, the highest jump in 11 years. Moreover, it was a significant gain over the 2nd Quarter GNP rate increase of 3.9%.
The stock market has boomed all year, with the Dow Jones closing last Friday at 18,053, near its all-time high reached a few days earlier.
The price of gasoline declined for 88 days straight through December 22, to a national average of $2.39 a gallon, and under $2 in some locations. Some experts are predicting the price could go lower by 10 to 15 cents a gallon.
Consumer confidence improved substantially as the economy showed positive signs. According to a December CNN survey, 51% of Americans viewed the nation’s economy as “good,” compared with 38% in late October. Over the same period, the share of those who believe economic conditions are “poor” declined from 62% to 49%.
The steep drop in oil prices – from $100 a barrel six months ago to just under $55 a barrel last week – is a double-edged sword, though on balance it is a significant boost to the US economy. On the downside, Texas lost some 2,300 oil and gas jobs in October and November. More job reductions in companies that help facilitate the exploration and production of oil are expected to take place in Texas, Oklahoma and Louisiana, with one estimate that some 45,000 jobs could be loss if crude oil prices remain low through the first half of 2015. Moreover, there’s a ripple effect to the non-energy economy in affected states, including a loss in tax revenues. In Louisiana, for example, the state loses $12 million for each one dollar drop in the price of a barrel of oil, noted Greg Albrecht, the Bayou State’s chief economist, in the New York Times.
While oil and gas jobs account for a decreasing share of Texas jobs – it’s now down to 3% – there is plenty of nervousness in the Lone Star State about the impact of the oil recession on the state’s prosperity. Politically, a rise in the jobless rate in Texas could harm the presidential prospects of out-going Gov. Rick Perry (R-TX).
On the upside, however, the precipitous drop in gasoline prices puts more cash in consumers’ hands, which was reflected in strong spending over the Christmas holidays. And this is likely to continue for a while. The government estimates that the average American household will have $550 more in 2015 than it had in 2014, due to lower gasoline prices. This extra money, combined with gains in employment, consumer confidence and other economic indicators, is likely to boost consumer spending in the coming year, creating more jobs throughout the economy.
This good economic news, combined with President Obama’s recent aggressive executive actions on immigration, the environment, and Cuba, has already improved President Obama’s approval rating significantly. If the good news continues, it may well strengthen the President’s hand in his dealings with the Republican-led Congress. And if it continues through the fall of 2016, which may or may not be likely, it could give the currently beleaguered Democrats a boost. Stay tuned.
Unemployment rates in Southern states Ranked by jobless decline
Nov/2014 Nat’l/Rank Nov/2013 Change Nat’/Rank
OK 4.4 14th 5.5 KY -2.1 6th
TX 4.9 16th 6.1 AR -1.7 10th
VA 5.0 17th 5.3 NC -1.4 11th
AR 5.8 25th 7.5 TX -1.2 13th
FL 5.8 25th 6.5 OK -1.1 18th
NC 5.8 25th 7.2 TN -1.1 19th
US 5.8 7.0 US -1.2
AL 6.0 30th 6.2 FL -0.7 26th
KY 6.0 30th 8.1 MS -0.7 26th
LA 6.5 38th 5.6 GA -0.4 35th
SC 6.7 41st 6.8 VA -0.3 38th
TN 6.8 43rd 7.9 AL -0.2 43rd
GA 7.2 48th 7.6 SC -0.1 44th
MS 7.3 50th 8.0 LA +0.9 51st