U.S. President Barack Obama said on Friday December jobs figures showed the road to economic recovery was "never straight" and meant the country must continue to explore ways to accelerate hiring.
President Obama unveiled a $2.3 billion tax credit Friday to promote clean energy technology and boost job creation in the hard-hit manufacturing sector.
The credit, from funds earmarked under an emergency $787 billion stimulus package Obama signed in February 2009, would create 17,000 new U.S. jobs and would be matched by an additional $5 billion in private capital.
High unemployment is one Obama's most pressing domestic challenges and a monthly payroll report released earlier on Friday served a reminder that labor market conditions are still grim. U.S. unemployment remained stuck at 10 percent in December, while businesses unexpectedly shed 85,000 jobs.
After the release of the jobs numbers, Austan Goolsbee, staff director and chief economist of the White House Economic Recovery Advisory Board, told CNBC that he thinks a jobs package is a necessity, and that the White House won't be satisfied until jobs start growing strongly again. He also said the economy is making some improvement but not enough when it comes to job creation.
Preoccupied in the first week after the year-end holidays by the fallout from a botched Christmas Day plane attack, the White House is expected to firmly switch its focus to growth and jobs.
The following are some of the reasons why Obama must boost jobs, or suffer the political consequences of failure:
What Are the Politics of Unemployment?
Beating back unemployment will be a key yardstick by which U.S. voters will measure Obama's White House, shaping his ambitious legislative agenda and going a long way to determining his own long-term political future.
Opinion polls consistently find American households anxious about job security.
So his failure to tackle this issue will cloud any victory that Obama can claim on health care, financial regulatory reform, climate change or the prosecution of wars in Iraq and Afghanistan.
In addition, these goals will themselves be harder to reach unless the White House can translate an economic recovery into an engine for job creation.
Obama's popularity has already drifted down to around 50 percent as the jobless rate has climbed.
This is likely to mean his Democratic Party will suffer in November mid-term congressional elections, when the party in power traditionally loses ground, unless the White House convincingly turns this trend around.
How Does Jobless Rate Impact Congress?
A reduced majority will make it even harder for Obama to push his reform agenda through Congress.
Weak party discipline has already complicated that task, despite a solid Democratic majority in the House of Representatives and 58 Senate seats, plus two independents who usually vote with the Democrats.
This gives Senate Democrats 60 votes, which is enough to thwart procedural delaying tactics by the Republican party opposition — provided everyone votes the party line.
In addition, the highest unemployment levels in 26 years are putting a serious drain on the country's budget, costing hundreds of billions of dollars in social safety-net payments and in lost income tax revenue.
AI
