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Obama drops the cautious tone of his economic message

January 12, 2015

WASHINGTON (AP) — President Barack Obama for much of last year was cautious when talking about the economy: It may be improving, he would say, but millions of Americans had yet to benefit.

Now that caveat is gone, replaced by a bullish new message as Obama enters his second-to-last year. “American resurgence is real,” he says. “Don’t let anybody tell you otherwise.”

Despite multiple signs the recovery is taking hold, some point to stagnant wages and an income gap between rich and poor. The clashing messages reflect Obama’s need to boost his economic credentials and establish a post-recession legacy.

Obama’s new message as he approaches his annual State of the Union address Jan. 20, comes as the public begins to warm toward the economy. An AP-GfK poll last month found negative perceptions of the economy overall are down compared with four years ago, with 57 percent describing it as “poor” compared with 83 percent who did in November 2010.

The new tone was evident last week during Obama’s trips to Michigan, Arizona and Tennessee, where he touted the government bailout of the auto industry, unveiled new housing measures and called for free community college. This week, he is focusing on information technology and cybersecurity.

His audience, aides say, is the two-thirds of voters who were too disgruntled to cast ballots in the November midterm election.

“They need to understand that there are reasons to be optimistic, that there is true, tangible, solid growth and that we believe it’s going to portend good things,” White House communications director Jennifer Palmieri said in an interview.

One indicator of a stronger economy: a 5.6 unemployment rate for December, the lowest since 2008. Employers added 252,000 jobs in December, a healthy gain that contributed to 2014 being the best year for hiring in 15 years. The average price of gas in the United States is $2.20 per gallon, the lowest since May 2009.

While the stock market has fizzled some in the past few days because of slumping oil prices, the Dow Jones industrial average set a record high by closing at 18,053 the day after Christmas.

White House officials also point to the Gallup Economic Confidence Index, which moved into positive territory last week for the first time since 2007.

How much of the credit Obama deserves is a matter of debate. Economies rise and fall because of numerous factors, not all driven by government policies. But in recent days, Obama has been touting his administration’s 2009 stimulus plan, the bailout of the auto industry, his health care law and new financial regulations as key factors.

Another key player has been the independent Federal Reserve Bank, which has kept its benchmark interest rate near zero for six years.

Still, weaknesses remain. Nearly 7 million people are working part-time but would prefer full-time work. Many out-of-work Americans have given up looking for jobs.

“For tens of millions of working families who are the backbone of this country, this economy isn’t working,” Democratic Sen. Elizabeth Warren said last week. “These families are working harder than ever, but they can’t get ahead.”

Central to Warren’s case are stagnant wages. Wages rose only 1.7 percent in 2014, hardly above the 1.3 percent inflation rate. Wages, however, have been flat or have declined for decades.

Palmieri said Obama hasn’t abandoned his commitment to tackle stagnant wages.

“That’s what’s left undone, right?” she said. “The president has been clear that is what the next two years are about.”

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Associated Press writer Jim Kuhnhenn in Washington contributed.

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