WASHINGTON – The unexpected slowdown in August job growth dealt a blow to President Obama’s hopes of gaining momentum coming out of his party convention and gave Republican candidate Mitt Romney another campaign weapon.
Friday’s Labor Department report will drive the political debate as both candidates stop in Iowa and New Hampshire, two key swing states. The labor data showed the economy added 96,000 jobs in August, down from a revised gain of 141,000 in July. While the unemployment rate fell to 8.1 percent from 8.3 percent in July, it was because more people gave up looking for work.
The figures were released at a pivot point in the 2012 presidential campaign, with both party conventions finished and the two candidates embarking on a final drive to persuade voters before the Nov. 6 election.
“The timing couldn’t be worse for the president in terms of coming out of a really good convention with some momentum,” said Stu Rothenberg, editor of the nonpartisan Rothenberg Political Report in Washington. “This just steps on that bounce, and I think it’s a big problem for the Democrats.”
Romney seized on the numbers when he landed in Iowa for a campaign event in Orange City. The employment report shows Obama’s policies aren’t working, Romney said.
“The president has been unable to deliver on virtually any of the promises he made four years ago,” Romney said.
In accepting the Democratic Party’s nomination for a second term Thursday night in Charlotte, N.C., Obama said his election prospects hinge on easing anxiety and convincing voters that the economy is on the right path. He repackaged familiar administration policies and set a goal of creating 1 million new manufacturing jobs by 2016.
“The truth is it will take more than a few years for us to solve challenges that have built up over decades,” he said. “Our problems can be solved. Our challenges can be met. The path we offer may be harder, but it leads to a better place.”
Jobs and the economy are the core issues in the race, and they remain a burden for Obama.
The unemployment rate has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948, and economic growth this year is below normal for the post-World War II era.
The August report showed 368,000 Americans left the labor force.
“I was, candidly, startled by how much the labor force declined,” said Matt McDonald, a partner at Hamilton Place Strategies in Washington who is advising the Romney campaign.
Jared Bernstein, who was an economic adviser to Vice President Biden from 2009 to 2011, said that if Obama was looking for a strong report, “this isn’t it. The president can accurately say we’re moving in the right direction, but we’re moving there too slowly.”
It has taken the United States three years to recover about half, or 4 million, of the 8.8 million jobs lost as a result of the 18-month recession that ended in June 2009.
The economy would have to add about 13.3 million jobs over the next three years, or 370,000 jobs each month, to cut unemployment to 6 percent.
To reach that goal, the economy would have to increase at an annual growth rate of 4 percent to 5 percent, according to economist Peter Morici at the University of Maryland.
By contrast, the economy grew at a 1.7 percent annual pace in the April-June quarter, slower than the 2 percent rate in the January-March quarter and 4.1 percent in the last three months of 2011.
“It’s worse than we should be seeing at this point,” said Phillip Swagel, former assistant Treasury secretary for economic policy in President George W. Bush’s administration and now a professor at the University of Maryland in College Park. “Romney can point to this number and say, ‘This is the best we’re going to get?’ ”
Former President Bill Clinton, speaking at the Democratic National Convention on Wednesday, appealed to voters to stick with Obama, saying no president could have fixed the economy in four years.
“But conditions are improving, and if you’ll renew the president’s contract, you will feel it,” Clinton said.
Only one U.S. president, Ronald Reagan, has been re-elected since World War II with a jobless rate above 6 percent.
The rate was 7.2 percent on Election Day 1984 after having dropped almost 3 percentage points in the previous 18 months.