Economic gains may not mean votes for Democrats

WASHINGTON (Reuters) - The U.S. economy has begun to rebound from a long recession, but Democrats could struggle to reap the rewards in November's congressional elections given persistently high unemployment and a gloomy voter mood.

Opinion polls show that Americans are still deeply worried about their jobs and finances despite recent signs of recovery, crimping Democratic hopes that an improved economic climate would help them retain control of Congress in November.

"Democrats are right when they say the economy is improving, but people just don't feel it," said Karlyn Bowman, who analyzes public opinion at the American Enterprise Institute think tank.

"It takes a long time for the public to sense change, and I think that's particularly true on something as close to people as employment or the economy," Bowman added.

President Barack Obama and his fellow Democrats frequently tout the economy's gradual climb out of its worst recession in 70 years, noting it has recorded growth in three straight quarters and added jobs for four straight months.

But the national unemployment rate remains stubbornly high at 9.9 percent, while Wall Street has been experiencing wild mood swings, fueling broad economic uncertainty five months before the congressional elections.

And while consumer spending has been picking up pace, surveys of consumer confidence show sentiment still fragile.

Jobs and the economy top the list of worries by far in public opinion polls. An AP-Gfk/Roper poll this month found nearly two-thirds of Americans knew someone who had lost a job in the last six months.

A Quinnipiac University poll released on Wednesday found that 74 percent of Americans believe the country is still in recession, 50 percent disapprove of Obama's handling of the economy and more voters believe Obama's policies have hurt rather than helped their personal finances.

Economic concerns are the biggest factor in a sour public mood that has already sent some incumbents in both parties to defeat and fueled Republican hopes of regaining majorities in the House of Representatives and Senate.

'BAD TIMES'

"The folks on Wall Street and ... in D.C. may see an improving economy, but until unemployment begins to fall significantly, voters still think we're in bad times," said Quinnipiac University pollster Peter Brown.

"Until Americans stop thinking we're in a recession, the White House can't stop holding its breath," Brown added.

Obama and Democrats say their job creation efforts, industry bailouts and a $787 billion stimulus package helped prevent a bigger recession.

A report from the nonpartisan Congressional Budget Office on Tuesday said the stimulus plan lowered the jobless rate and boosted economic growth in the first three months of 2010.

"That's not a bad 18 months' work," Obama told guests at a fund-raiser in California on Tuesday night after outlining the steps he has taken on the economy, to pass healthcare reform and to move close to final congressional passage of Wall Street reform.

But some Democrats say the party should be careful to acknowledge that there is plenty of hard work ahead and focus on the next steps to be taken to improve the economy.

"The great challenge for Democrats is to take credit for turning the corner but recognize there is still a long way to go," Democratic consultant Dane Strother said.

"If you say things are great and people think they are not they can find you out of touch," Strother said. "If we rush out there making ads saying we brought back the economy we're going to look like fools."

LOOKING FORWARD

In a memo last week, the Democratic polling firm Democracy Corps said Democrats need to adjust their message on the economy to reach voters still suffering the effects of the recession. By focusing too much on economic improvement, Obama is asking voters for credit rather than looking forward.

"Voters resent political leaders trying to get that kind of credit when they are still living through such tough times," memo authors James Carville and Stan Greenberg said.

Republicans have focused their criticism on growing U.S. spending and debt under Obama, and a grassroots conservative "Tea Party" movement has arisen in opposition to Obama and support of more limited government.

"We simply have a large difference of opinion, which is not likely to be settled until November, about taxes, spending, debt," Republican Senator Lamar Alexander said.

But a key part of the Democratic campaign message has been to contrast their economic stewardship with the years spent under Republican President George W. Bush.

"While we haven't gotten all the way out of the woods, it would be a big mistake to go back to the same economic agenda that put us there," said U.S. Representative Chris Van Hollen, who heads the campaign effort for Democratic House candidates.

Republicans say the "it's Bush's fault" message has run its course.

"We are far enough into the Obama administration and they have been successful enough on the Hill with these gigantic programs that they cannot blame George W. Bush anymore. This is Mr. Obama's economy," said Republican consultant Rich Galen.

(Editing by Simon Denyer and Will Dunham)