Another terrible jobs report today: The establishment survey reported the economy added just 115,000 jobs. While the unemployment rate fell to 8.1 percent, according to the household survey, it was once again for the wrong reason. The unemployment rate is simply a ratio – the number of people counted as unemployed divided by the number of people in the labor force. The rate fell because of a notable drop in the latter, fewer folks are looking for work.

In fact, the household survey actually found 170,000 fewer jobs in the country this month. What’s more, the broadest measure of employment – the employment population ratio – is unchanged over the last year, despite a drop in headline unemployment from 9 percent to 8.1 percent. The employment population ratio is just 58.4 percent; a level that, prior to this recession, we had not seen in over a generation.

What does this mean for Obama’s reelection prospects, as well as the Romney campaign?

The economic picture is the bleakest for any president seeking reelection in a long time. As Sean Trende argued in late January, a composite view of the economic data suggests 2012 is a worse economic climate than 1968, 1976, 1992, and 2000 – in all those years, the incumbent party lost. It is comparable to 1960 (another losing year for the incumbent party) and only the disastrous cycles of 2008 and 1980 saw a worse economic climate for the incumbent party. In other words, no incumbent party has won reelection in a negative climate quite like this.

There is a debate among conservative pundits whether and to what extent Mitt Romney should engage in the distractions offered by Barack Obama – the war on women, the student loan debate, the Osama bin Laden triumphalism.

My advice to Team Romney: ignore them all and focus on the fundamentals. Obama has enjoyed a bit of an approval bounce because of these campaign maneuvers, but the real fight is going to turn on three core issues.

First, and most obviously, the economy. As today’s jobs number, combined with recent data, clearly suggest, the economy is still running just above stall speed – not enough to create many new jobs, certainly not enough to generate broad prosperity. Romney needs to stretch back to the candidacies of pro-growth conservatives like William McKinley, Calvin Coolidge, and above all Ronald Reagan to run a “full dinner pail” campaign: Make clear that a Romney administration would focus like a laser beam on jobs and paychecks – and let Obama “slow jam” the news to appeal to the youth vote.

Second, the deficit. Easily the biggest sleeper issue of this cycle, it could have an explosive political effect when Romney starts talking about it. People have an intuitive understanding of the problems of a deficit, and today’s deficit is unprecedented for peacetime.

Third, the health care bill. Assuming the Supreme Court does not strike it down, this is a political goldmine for Team Romney, which need not be constrained by the fact that he is the author of the Massachusetts health care bill. Romney can and will focus on the non-ideological problems with the bill, like the overall cost, the cuts to Medicare, and the fact that many people will lose their current insurance. (And if the Court does strike it down, there will still be a focus on health care--so the Romney campaign should still be prepared to offer solutions, not just talking points.)

These are the fundamental issues that will drive this campaign. But the Romney campaign can't take a narrow view and stop there. It must offer an alternative vision, not simply an anti-Obama position. Romney needs to be seen as a candidate who would be a competent president and problem solver.

Hats off to Team Obama for getting the conversation away from them for the last few weeks. Indeed, as campaign craft goes, it has been most impressive (although it would be more so if the president did not have the benefit of a compliant press corps). But by the time the electorate really starts to focus on the choice in front of them, these issues are going to be on the top of the agenda. And right now they all favor Mitt Romney.

Jay Cost is a staff writer at THE WEEKLY STANDARD and the author of Spoiled Rotten, a critical history of the Democratic party, forthcoming from Broadside Books.

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