WASHINGTON -- President Obama may be getting great pleasure from the Republicans' lengthening battle over who can beat him in November. But he faces a much stronger opponent between now and then: a weakened U.S. economy.
The 3 percent fourth-quarter growth rate in the nation's gross domestic product was welcome news, but the fact is that the Obama economy grew at a sluggish 1.7 percent for all of 2011.
And it isn't expected to do a great deal better this year, either, according to the National Association for Business Economics. It is predicting only modest growth of 2.4 percent for the rest of this year.
Americans may not follow the economic growth rate that closely, but they do follow the unemployment rate, which has always been a lagging economic indicator. And that in the end may be Obama's political undoing this fall.
The government's unemployment rate, which has to be taken with a large grain of salt, is 8.3 percent. But the daily surveys conducted by the Gallup Poll put the jobless rate at 9 percent, and worse, the "underemployment rate," which includes people who can't find full-time work or who have dropped out of the work force, at 19 percent.
Independent economists also believe the government's statistics undercount the real unemployment rate. "But for an alarming increase in prime-working-age adults choosing not to look for work, unemployment would be 13 percent," says University of Maryland business economist Peter Morici.
In another gloomy economic forecast, Fed Chairman Ben Bernanke told lawmakers Wednesday that the nation still faced major economic challenges before it was going to fully regain its health.
"The unemployment rate remains elevated, long-term unemployment is still near record levels, and the number of persons working part-time for economic reasons is very high," Bernanke told the House Financial Services Committee.
He reiterated that the unemployment rate isn't likely to drop much more than it has so far, and any further decline will "edge down only slowly" in coming years.
If Obama is hoping that the unemployment rate will fall gradually over the year and lift his chances for a second term, Fed forecasters threw cold water on that notion. They are predicting that the unemployment rate will still be between 8.2 percent and 8.5 percent at the end of this year.
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