WASHINGTON – Friday’s monthly unemployment report provides Republican Mitt Romney a fresh chance to highlight discontent over the economy even as President Obama pre-empted him with a swing-state ad campaign attacking the challenger’s tax plan.
While payrolls rose by 163,000, more than forecast, the jobless rate increased to 8.3 percent from 8.2 percent, a five-month high, the Labor Department reported.
Neither number is likely to sway many voters, said Dan Schnur, an adviser to John McCain’s 2000 presidential campaign.
“Voters already know what they think about the economy,” said Schnur, director of the Unruh Institute of Politics at the University of Southern California. “What’s left is for them to decide who can do something to make it better.”
Private forecasters had expected the unemployment rate to hold steady at 8.2 percent and payrolls to increase by 100,000 after an 80,000 gain in June, according to the median forecast of economists surveyed by Bloomberg News.
U.S. stocks rose in response to the report. The Dow Jones industrials surged 217 points.
The increase in payrolls for July was boosted by a pickup in employment at automakers as they kept more plants open during annual retooling related to the new model year. Chrysler and Ford are among companies that said they would idle fewer plants.
Employment at private service providers increased 148,000, the most in five months, reflecting more jobs in education and health services. Construction companies cut payrolls by 1,000 workers and retailers added 6,700 employees. Government payrolls decreased by 9,000 for a second month.
The economy is the dominant issue in the presidential race, and the two campaigns are framing the debate differently.
“Today’s increase in the unemployment rate is a hammer blow to struggling middle-class families,” Romney said in a statement released Friday. “President Obama doesn’t have a plan and believes that the private sector is ‘doing fine.’ Obviously, that is not the case.”
Romney said his economic proposals would help raise household incomes. He vowed to create 12 million new jobs by the end of 2016 if elected.
Alan Krueger, chairman of the White House Council of Economic Advisers, said the jobs numbers show the economy is “continuing to heal from the very deep wounds” of the recession.
Conceding on Bloomberg Television that “the unemployment rate is too high,” he repeated the administration’s call for lawmakers to extend tax cuts for middle-income Americans and act on Obama’s proposals for spending on infrastructure and aid to state and local governments to spur hiring.
Congress has started its August recess, and any action before the November election is unlikely.
Obama is pursuing a strategy of pleading for patience on the economy while accusing Romney of favoring wealthy taxpayers at the expense of middle-income Americans. Romney is trying to keep the focus on the state of the world’s largest economy and an unemployment rate that has been stuck at more than 8 percent for three years.
Obama plans to underscore his tax message at a White House event today with middle-income families in which he will criticize congressional Republicans for “holding hostage” tax cuts that benefit the middle class.
Congressional Republicans want all of the tax cuts that were passed under George W. Bush extended, while Obama wants the tax cuts extended only for families with income under $250,000.
The Romney campaign issued a “white paper” Thursday written by four of the candidate’s economic advisers arguing that the U.S. economy is “stuck in a low-growth trap” because of Obama’s “economic errors and poor choices” such as an economic stimulus financed by government debt.
