Democrats are basking in the glow of the Supreme Court’s declaration of the validity of the Obama health care legislation. They are also basking in glow of Republican hissy fits. Republicans are furious that the law was not struck down, yet are going to great lengths to claim the decision was a huge victory. And while some Republicans are focusing on the penalties in the law as a ‘tax’ Mitt Romney is asserting strongly that it is not a tax (since he had the same structure in his health care law). This is fine entertainment indeed.
But soon the June unemployment data will be available, and that will almost certainly put a damper on the Democrats. The problem is that the spring slowdown is creeping into summer, particularly in manufacturing.
New figures Monday provided the latest proof that Europe's debt and banking woes and disappointing growth in
China and around
the globe are crimping activity in the manufacturing sector, which
has been a big driver of the economic recovery that began in mid-2009. U.S.
Other reports have suggested
exports were much weaker than originally thought earlier this year and that
corporate profits from abroad are now shrinking instead of growing. U.S.
The Institute for Supply Management's index of
manufacturing activity, based on surveys of purchasing managers across the
country, dropped to 49.7 in June from 53.5 in May—the first signal of slowing
activity since July 2009. U.S.
below 50 indicate contracting activity. Economists had expected a more modest
drop to 52 Readings
In fact there has been nothing in the economic news to suggest that employment will have made significant gains in June, and a lot to suggest that it has not. Mr. Romney wants only to talk about jobs. When the new unemployment data is released he gets his wish.
All of this tends to confirm the opinion of this Forum, that as the summer progresses Mr. Romney will develop a statistically significant lead. After the Olympics Mr. Romney will get favorable press (that’s the only kind he really gets these days) for his VP selection. Then comes the August Republican convention and the beginning of massive negative ads against Mr. Obama. Finally polls will start to report on likely rather than registered voters.
As for Mr. Obama, well good luck Mr. President, you are going to need it.