Economic 'fits and starts' could give Dems fits in 2010 campaign

A U.S. economy that moves in "fits and starts," as President Barack Obama diagnosed it on Saturday, could prove perilous for lawmakers and particularly Democrats running for reelection in 2010.

The steady drumbeat of economics statistics portray a Janus-faced economy.

Housing prices show improvement, but foreclosures continue to mount. Private forecasters and the Obama administration predict the economy is already growing -- which, if accurate, would mean the recession is technically over. But the impact on job markets and Main Street is lagging well behind.

The rate of job loss is down -- although Friday's numbers for September were worse than August's -- but the overall level of unemployment will likely keep rising into 2010. The government is winding down financial rescue programs and many Wall Street banks are profiting, but smaller banks are failing and finding themselves in government takeovers.

And amid the unemployment numbers released on Friday was a powerful revision. Between March 2008 and March 2009, more than 800,000 additional Americans lost jobs than was previously reported.

"Sobering" statistics, Obama said on Saturday. The labor market would have to add an average of 573,000 jobs each month for two years to return to pre-recession levels, according to the Economic Policy Institute (EPI), a left-leaning think tank. The economy is 10.7 million jobs below the unemployment rate before the recession started in December 2007, EPI said.

A new normal of uncertainty will likely weigh heavily on the electorate.

Obama is already talking of seeking out "additional options" to bolster the economic recovery. Congressional lawmakers and Obama administration officials are debating whether to extend tax credits for new homebuyers and unemployment benefits.

Meanwhile, Republicans continue to hammer the administration and congressional Democrats for passing a $787 billion fiscal stimulus package earlier this year. Republicans argue it was misguided and did little to buttress the economy. The administration and private forecasters said it has helped stave off an even worse recession and will continue to be phased in well into 2010.

Apart from partisan debate over the stimulus, the tenuous nature of the economy is showing up in poll numbers and could, if it lasts, impact on the midterm elections.

More than three-quarters of the U.S. population are unhappy with the economy, according to the latest NBC/WSJ poll. That's despite a 12 percentage point increase, to 23 percent, between January and September of Americans who are satisfied with the economy. Meanwhile, forty-seven percent of Americans believe the economy will improve, but 50 percent say it will either get worse or stay the same.

"We will need to grind out this recovery step by step," Obama said on Saturday. And that may mean a real grind for lawmakers on the ballot in one year.

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