The national unemployment rate in October fell to 5 percent, the Bureau of Labor Statistics reported on Friday — the lowest mark of the Obama presidency.
Politicians might battle over the "real" unemployment rate, but don't be fooled: The BLS data is trusted by economists, and Friday's new number is a key milestone for economic policy. Namely, 5 percent unemployment means we're on the edge of the 4.9 percent level that the Federal Reserve considers as necessary for "full employment," Sho Chandra writes for Bloomberg.
The timing couldn't be more important; Fed economists are meeting next month, and Friday's strong jobs report and low unemployment rate could encourage them to hike US interest rates for the first time in nearly a decade.
And 5 percent unemployment is an incredible symbol, too. Six years ago this week, BLS reported that unemployment had passed 10 percent, the first time in decades that the US unemployment rate had hit double digits, and a visible sign of how bad the Great Recession really had become.
Obama can now argue that under his watch, unemployment has been cut in half. It's a striking improvement — especially when measured against Obama's predecessor.
President George W. Bush inherited 4.2 percent unemployment in January 2001. That rate had grown to 7.8 percent when he left office eight years later and hit 8.3 percent in the first full month of Obama's presidency.
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The quick rise and dramatic fall of the unemployment rate during the Obama years is unusual. In the past 50 years, there's only been one other president — Ronald Reagan — who saw a bigger swing between high and low unemployment during his terms in office.
(Under Reagan, unemployment peaked at 10.8 percent in December 1982. By his final full month as president, it had fallen to 5.3 percent.)
How much credit does a president deserve for unemployment?
Americans tend to praise presidents for job creation or blame them for economic collapse, but that's not entirely fair.
For example, the early 2000s US economy was floating on the tech bubble, which happened to pop while Bush was in office. And near the end of Bush's second term, deep structural problems in the economy and global fears fueled the recession.
But it's also wrong to say that presidents have nothing to do with job creation or the broader economy. Bush made the decision to enact major tax cuts, launch two wars overseas, and spend about $1 trillion on homeland security — and each one of those moves significantly increased the US deficit and contributed to a weaker economy.
Meanwhile, Obama's January 2009 stimulus package and the March 2010 Affordable Care Act clearly affected the economy, too, and seemingly in more positive ways. For instance, the stimulus created about 2.5 million jobs, according to Michael Grunwald, who wrote a history of the stimulus called The New New Deal.
"Job losses peaked the month before [the stimulus] passed," Grunwald wrote in August 2012. "The jobs numbers that spring, while grim, marked the biggest quarterly improvement in almost 30 years. The Recovery Act launched a weak recovery, but even a weak recovery beats a depression."
