Although the election is less than a year away, the candidates for the US President are already making mind-boggling speeches for the betterment of the US economy. Only time will decide if the new President will be able to walk the talk or not. At this point in history, the US economy has been treading along a thin red line, whereby a slight fall on either side could affect the depleted economy.  The current job growth provides a glimmer of hope but this hope has only been the small ray amongst the dark clouds enveloping the economy.

Another important question that creeps up is-Will Barack Obama be re-elected? The fact that George Bush was re-elected amidst the then gloomy economy could serve as an encouraging sign for Obama. The current employment situation still poses a serious question of whether the improving situation is temporary or permanent. But turning back the pages of history, the same was true for the previous two recessions. The turnaround came late to save the axe for George Bush Senior.

Could Obama embrace the same fate? On 6^th January 2012, the government reported that employment had risen by 200,000 in December compared with the figures of November, the best gain since April. This indicator corroborates a cluster of other reports that show an economy picking up steam. The unemployment rate meanwhile has fallen half a point in the past three months to 8.5%, the lowest since early 2009. However, the economy still faces the problems of heavily indebted consumers and fiscal graveness at all levels of government. But all these things are at the margin, getting better, rather than worse.

Whether the above will change Obama’s fortunes in time for election is another matter. Employment is climbing out of a far deeper hole now than in 2004, and there is also no way the unemployment rate will be below 7.3% come November, said to be the historical dividing line between winning and losing the hot seat.

In 2004, Bush could advertize his credentials on battling terrorism even if the economy was moving along a lackluster stage. Now, the economy has overtaken all agendas in the list, the last being the killing of Osama bin Laden. Obama will have little to boast about if the recovery fizzles out; but his opponents will have even less to say if the economy continues to gather speed.

Have a great weekend everyone!