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Jobs report poses challenges for Obama

Mitt Romney spoke at a campaign rally Friday in Orange City, Iowa.Evan Vucci/Associated Press

WASHINGTON -- The US Labor Department said the economy added 96,000 jobs in August, but many thousands more quit looking for work in an economy still long from full recovery. Although the unemployment rate dropped two-tenths of a point to 8.1 percent, the disappointing news portended challenges for President Obama, who accepted his party’s nomination Thursday night for another four years in the White House.

The jobs report became immediate fodder on the campaign trail. Republicans seized on the jobs report as evidence of the president’s failure to deliver on promises of fixing the broken economy.

“If last night was the party, this morning is the hangover,” the GOP’s presidential nominee, Mitt Romney, said in a statement.


“After 43 straight months of unemployment above 8 percent, it is clear that President Obama just hasn’t lived up to his promises and his policies haven’t worked. We aren’t better off than we were four years ago,” Romney said. He vowed to create 12 million new jobs by the end of his first term, if elected.

The Obama campaign was obviously hoping for better news. Especially troubling was the fact fewer people were actively looking for work, many of them thinking their prospects of finding a job were too bleak.

The White House tried to put its best spin on the numbers.

“While there is more work that remains to be done, today’s employment report provides further evidence that the US economy is continuing to recover from the worst downturn since the Great Depression,” said Alan B. Krueger, chairman of the president’s Council of Economic Advisers.

“It is critical that we continue the policies that are building an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007. “


Krueger said the president will continue to push for his American Jobs Act, which was rejected by Republicans earlier this year, to spur jobs by investing in roads and other infrastructure, as well as allow states and local communities to hire more teachers and emergency first responders.

He also said Obama would push to extend tax cuts that would save the typical middle class family from a $2,200 tax increase next year.

“As the administration stresses every month, the monthly employment and unemployment figures can be volatile, and employment estimates can be subject to substantial revision,” Krueger said. “Therefore, it is important not to read too much into any one monthly report and it is informative to consider each report in the context of other data that are becoming available.”

Secretary of Labor Hilda L. Solis, a member of President Obama’s Cabinet, issued a reminder with Friday’s news.

“When President Obama came into office, the economy was in a free fall, credit markets were frozen, and our nation was bleeding hundreds of thousands of jobs a month. We’ve now added back 4.6 million private sector jobs over the last 30 months, including nearly 2 million in the last year alone.

“An economic crisis that was decades in the making will not be solved overnight, but our recovery remains on a stable trajectory of positive job growth. Smart and steady wins the race,” she said.

The race that now matters is the one for president, which could hinge on key battleground states that have some of the country’s highest rates of joblessness -- including Florida, Nevada, Colorado, and North Carolina, which hosted the Democratic National Convention this week.


Republicans are using the economy as the centerpiece of their campaign to oust Obama from the White House.

In an appearance on CNBC Friday morning, Romney’s running mate, Representative Paul Ryan of Wisconsin, said the August jobs numbers resulted from “failed leadership in Washington [and] bad fiscal policy coming from the administration.”

Ryan is largely responsible for a Republican austerity plan that would reduce government spending by $5.3 trillion over 10 years, as well as cut the top 35 percent tax rate to 25 percent, as part of a two-tiered tax system. The combination of spending cuts and lower taxes, he argues, will help stimulate economic growth.

Ryan’s budget, however, has come under attack for what critics call draconian cuts to social welfare programs, including a projected reduction of $133.5 billion from the food stamp program over 10 years and $170 billion from college Pell Grants.

“We need economic growth and we can get that if we get the right policies in place,” Ryan said Friday.

While the president won a major victory shortly after assuming office when Congress approved his $787 billion stimulus program, his critics derided it as ineffectual.

House Speaker John Boehner, a Republican from Ohio, said the August jobs report “underscores President Obama’s failed promises to get our economy moving again.”

“We can do better,” Boehner said.


“The American people are still asking, ‘where are the jobs?’ We need a president and a Senate with the courage to let go of the failed ‘stimulus’-style policies of the past and work with Republicans on proven pro-growth measures to tackle our debt, address high prices, and create a better environment for jobs.”

Democrats countered by accusing Republicans of opposing jobs measures proposed by the president.

“While our recovery is still moving too slowly for many Americans, job growth would likely have been even stronger if Republicans had not blocked Democratic efforts to hire more teachers, fire fighters and police officers,” said Senate Majority Leader Harry Reid, a Democrat from Nevada.

“The best way to speed up our recovery is for Republicans to stop their knee-jerk obstruction of every effort Democrats put forward, and start working across the aisle to find common ground.”

Reid said the Senate next week will vote on a measure to give employers incentives to hire veterans.

Bobby Caina Calvan can be reached at Follow him on twitter @GlobeCalvan.