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Jobs Prove to be Bigger Issue than Deficit in 2012 Election

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2012 Election: Debt, Dollar, or Jobs?

Even with the debt ceiling and a risky dollar plaguing the nation, the largest factor weighing on voters minds for the 2012 election is employment.

Fifty-six percent of the participants say creating jobs in the U.S. is the most important item on the list for Congress and the President to work on this year, according to a report by Washington's Mellman Group and Ayres McHenry and Associates (via Bloomberg). Not far behind job creation, reducing the federal deficit and cutting government funding are ranked at 40 and 36 percent, respectively.

The major priority for the election may be increases in job opportunities. But the feeling for manufacturing is that too many of the jobs are being lost with a majority of them going overseas, especially to China. The argument by some of the participants lies upon manufacturing and increases in manufacturing jobs being the backbone of the U.S. economy and its overall recovery.

The Importance of Being Employed

Manufacturing is not the only industry taking a hit considering both Research in Motion (NASDAQ: RIMM) and Credit Suisse (NYSE: CS) slashed 2,000 jobs after weak second quarter reports. In addition to recent cuts, the U.S. Gross Domestic Product mustered a growth rate of only 1.3 percent. Not only does the low GDP output present problems for lifting the economy, but it has also reduced the American belief that the U.S. has the world's strongest economy. The result for unemployed manufacturing workers is lower morale and anger towards Congress and President Barack Obama to pursue protectionist trade laws and tax credits.

According to survey participants, 61 percent of Democrats, 61 percent of Independents, 65 percent of Republicans, and 66 percent of Tea Party supporters believe that the U.S. does not have the strongest economy in the world. Thirty-nine percent believe China has the world's strongest economy despite having approximately one-third of the GDP.

The Young and Jobless

While voters will be researching candidates who focus on the creation of jobs, the focal point of the election could be the youth vote. In 2008, President Obama secured his presidential victory with the help of younger voters. But will he be able to win a second term without increases in job opportunities or the same youth support?

According to J. Jennings Moss of Portfolio.com, recent reports find that “nearly one in five college graduates is out of work and that more than 17 percent of 16-to-24-year-olds who want jobs can't find them.”

Both young men and women prefer creation of jobs rather than the reduction of the deficit at 66 and 73 percent, respectively. In relation to political parties as a whole, 80 percent of Democrats, 67 percent of Independents, 53 percent of Republicans, and 50 percent of Tea Party supporters prefer creating jobs compared to reducing the deficit.

Since March, the number of unemployed persons has increased by 545,000, and the unemployment rate has risen by 0.4 percentage point, according to the U.S. Bureau of Labor Statistics.

Voters may be focusing on new job opportunities for the 2012 election, but without restructuring the U.S. national debt and stabilizing the dollar, new opportunities may be few and far between.

The research conducted by Washington's Mellman Group and Ayres McHenry and Associates was obtained through a survey of 1,202 likely 2012 general election voters on June 14-19, 2011 with a margin of error of plus or minus 3.1 percentage points.

ACTION ITEMS:

Bullish:Traders who believe that job opportunities are going to increase might want to consider the following trades:

  • Buy stock in companies looking to hire new employees such as Google (NASDAQ: GOOG), Wal-Mart (NYSE: WMT), and Amazon (NASDAQ: AMZN).

Bearish:Traders who believe that job opportunities are going to decrease may consider alternate positions:

  • Short stock in companies with high salaried employees, especially those with second quarter results that did not meet their estimates.

Neither Benzinga nor its staff recommend that you buy, sell, or hold any security. We do not offer investment advice, personalized or otherwise. Benzinga recommends that you conduct your own due diligence and consult a certified financial professional for personalized advice about your financial situation.

Posted-In: 2012 Election Ayres McHenry and Associates Democratic Party GoogleNews Economics Media General

 

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