By Ros Krasny
UNITY, New Hampshire (Reuters) - The month of May was a happy milestone for New Hampshire as the jobless rate fell to 4.8 percent, the lowest since December 2008 and the third best rate in the United States.
The state's relatively sound economic health should be good news for President Barack Obama's 2012 re-election hopes in the New England state that often is seen as a barometer for the national political mood.
But not so fast -- despite weathering the recession and weak recovery better than most of the country, New Hampshire residents are still gloomy about the economy. That makes it more difficult to predict which way the state will go when Obama faces re-election in 2012.
"The economy seems to have bottomed out and kind of stayed there," said George McLellan, 50, who is a farmer and also looks after developmentally disabled adults in Unity.
Obama's job performance rating in New Hampshire -- a state he won in 2008 with 54 percent of the vote -- remains low, according to an opinion poll last month.
The poll, conducted by the University of New Hampshire Survey Center for WMUR television station, showed Obama with a 46 percent job approval rating against 49 percent disapproval.
Fifty-six percent of New Hampshire adults disapproved of Obama's handling of the economy and barely one in three felt the country is headed in the right direction.
New Hampshire has diversified its economy in recent years, with tourism, high-tech, professional services and agriculture all supplying jobs.
But many residents just do not feel positive, partly because of high gas prices and the high national jobless rate of 9.2 percent.
Many Unity residents work in the larger nearby towns of Newport and Claremont, or in Keene, almost an hour away on country roads. "For a $10 an hour job, with $4 a gallon gas, that's tough," McLellan said.
Political trend-watchers and opinion surveys suggest former Massachusetts governor Mitt Romney is likely to win the New Hampshire Republican primary. Also the front-runner in the national Republican race, Romney criticizes Obama on an almost daily basis about the high unemployment rate.
The group Public Policy Polling says that if an election had been held earlier this month, Romney would have pipped Obama in New Hampshire, 46 percent to 44 percent.
"Obama's slipped a lot from 2008 in New Hampshire but at this point it looks like the GOP has to nominate Mitt Romney to take advantage of the president's declining popularity," said Dean Debnam, president of the polling group.
STILL HOPE FOR OBAMA
The good news for Obama, if any, is that he still could have time on his side, said Andrew Smith, director of the survey center at the University of New Hampshire in Durham.
"The economy is not looking good right now but the first quarter economic figures for 2012 will set the tone for the campaign," Smith said.
Romney, who has an 11-acre vacation estate on Lake Winnipesaukee, about 25 miles from Unity, has made the economy and jobs the focus of his campaign so far.
Romney has been the front-runner in every New Hampshire Republican poll taken this year and the latest WMUR survey showed him with 35 percent support. Minnesota Representative Michele Bachmann was second with 12 percent.
New Hampshire residents have felt the trickle-down impact of the residential housing bust that first plunged the nation into recession in December 2007.
New Hampshire's forestry and paper milling industry has been in a long decline, driving up joblessness in the northern part of the state. The more recent slowdown in construction has been another blow.
In Unity, coppersmiths Steve and Cathy Morse have almost abandoned their business of making whimsical weather vanes in the shape of dogs, cows and dragons. No home construction means no demand for weather vanes.
"Business has been really slow. Three years ago I was very busy and then it just dropped of the edge," said Steve Morse, 58, who does odd-jobs such as lawn-mowing to scrape by.
Across the state, in Carroll County, voters have traditionally leaned Republican in federal elections. Obama in 2008 became the first Democrat to win the county since 1912.
A repeat performance in 2012 now looks unlikely.
(This story was corrected to change the name of the polling group in paragraph 12 and of the group's president in paragraph 13)