There are two big pieces of economic news today that will indirectly impact Obama’s re-election chances given how important economic growth is to the success of incumbent political parties/leaders. The first is that the American economy grew at the annual rate 2.5 percent in the third quarter and the other is that European leaders have agreed to some new plan to help deal with their current Euro crisis.

While 2.5 percent growth is better than we have seen in a while, it is still only sufficient to keep up with growth in the labor market. This means if we continue to have 2.5 percent growth our economy will remain stalled in the terrible position it currently is in. We will not see the unemployment rate decrease.

This means the economy for most people is not getting worse but it is not getting better either. For his re-election Obama needs an economy that many Americans feels is improving, 2.5 percent growth will not produce that.

The new European deal has caused world markets to increase, but that is mainly because from the markets’ perspective any action is better than the total paralysis we have seen. This new deal gives the feeling of being another move by Europe to kick the can down the road.

From Obama’s political perspective all that matters is the economy over the next 12 months until the election. For him having the can potentially kicked down the road past the 2012 election is preferable to having it explode now, but this deal is not the big action Europe needs to really start growing again. The chance that Europe will drag our economy down even further before November 2012 has decreased, but it doesn’t look like Europe will be really helping lift us up.

On both fronts the economic news is technically better than what some legitimately feared might happen, but that doesn’t make either actual good news. When you are an incumbent leader with a terrible economy facing a rapidly approaching election, what you need is unequivocally good economic news, not just less terrible than feared news.

Jon Walker

Jon Walker

Jonathan Walker grew up in New Jersey. He graduated from Wesleyan University in 2006. He is an expert on politics, health care and drug policy. He is also the author of After Legalization and Cobalt Slave, and a Futurist writer at http://pendinghorizon.com