“It seems that almost every bit of data about the health of the U.S. economy has disappointed expectations recently,” Mike Riddell, a fund manager at M&G Investments in London, told CNBC yesterday. “U.S. house prices have fallen by more than 5 percent year on year, pending home sales have collapsed and existing home sales disappointed, the trend of improving jobless claims has arrested, first quarter GDP wasn’t revised upwards by the 0.4 percent forecast, durables goods orders shrank, manufacturing surveys from Philadelphia Fed, Richmond Fed, and Chicago Fed were all very disappointing. And that’s just in the last week and a bit,” Riddell said.
The anemic and weakening state of the economy is now dominating the news. The Wall Street Journal’s front page headline today is, “Economic Outlook Darkens”; the Washington Post headline is, “Few remedies left as recovery’s momentum lags.” And the New York Times front page story on the economy begins this way: “No American president since Franklin Delano Roosevelt has won a second term in office when the unemployment rate on Election Day topped 7.2 percent. Seventeen months before the next election, it is increasingly clear that President Obama must defy that trend to keep his job.”
What is so politically dangerous for Obama are three things. First, his entire presidency has been marred by a sick economy and a stunningly weak recovery (so weak that roughly half of the public believes we’re either still in a recession or now in a depression). Second, in many key areas the trajectory is getting worse, not better. And third, the Obama administration made promises early on that have either already been broken (e.g. unemployment will not rise above 8 percent) or cannot possibly keep (cutting the deficit in half, restoring millions of lost jobs, etc.).
The president has less time than he may think to turn impressions around. The public is associating Barack Obama’s tenure with American decline. And that, for a president, is politically dangerous—quite possibly politically lethal.