Analysis: Weak jobs report delivers blow to Obama

[September 08, 2012]  WASHINGTON (AP) -- The disappointing August jobs report raises yet another campaign obstacle for President Barack Obama and makes his hopes of holding onto his own job even more challenging -- especially in closely contested battleground states with painfully high levels of unemployment.

Coming less than 12 hours after the president accepted his party's nomination for a second term, the lackluster report could wipe out or diminish any traditional bounce in the polls he might have gotten from the festive, well-choreographed three-day Democratic National Convention.

"The broad message here is flat, flat, flat," said economist Heidi Shierholz with the labor-affiliated Economic Policy Center.

A disappointing report for one month might be dismissed in normal times as an aberration, she said, "but a stagnant report when the unemployment rate is over 8 percent represents a continuation of the crisis," meaning that getting back to pre-recession employment levels will take many more months, even years.

The bleak news played right into the hands of Republicans, who claim that Obama's policies inhibit job production and have made the economic picture worse. "Did you see the jobs report this morning by the way?" Republican rival Mitt Romney asked reporters in Sioux City, Iowa. "Almost 400,000 people dropped out of the work force altogether. It's is simply unimaginable."

The overall unemployment rate declined from 8.3 percent to 8.1 percent last month, which should be good news, but the "improvement" came only because more people gave up looking for work.

Just 96,000 new jobs were created in August, sharply down from the revised July number of 141,000 and below the threshold of 100,000 to 150,000 new jobs needed each month just to keep pace with working-age population growth.

That's not good news for an incumbent president up for re-election in just 60 days. It was another sharp reminder that the economy isn't Obama's friend.

Even though the president likes to talk about recent private-sector job growth -- for 30 consecutive months now, as he noted Friday in a campaign stop in New Hampshire -- there are still 261,000 fewer people employed today than when he was sworn in. The jobless rate then was 7.9 percent. It hasn't been below 8 percent since.

Job production clearly is "not good enough" and the economy needs to churn out jobs faster, the president said, calling the road to recovery "a long, tough journey."

Friday's jobs report complicates the electoral math for Obama and increases the political pressure on his campaign in battleground states with unemployment rates even higher than the national average. Nevada, for instance, has a 12 percent jobless rate, North Carolina has 9.6 percent, Michigan 9 percent, Florida 8.8 percent and Colorado 8.3 percent. Those state figures are all for July, the most recent month available.

So far, Obama has generally held the edge in polls in many of these states.

Both Obama and Romney campaigned Friday in battleground states with better-then-average jobs numbers. Unemployment in New Hampshire in July was 5.4 percent and in Iowa, 5.3 percent. Other battleground states in this category are Virginia, at 5.9 percent; Ohio at 7.2 percent, Wisconsin at 7.3 percent and Pennsylvania at 7.9 percent.

Expect both campaigns to redouble their efforts and spending in the higher unemployment states.

Jared Bernstein, a former economics aide in the Obama White House assigned to Vice President Joe Biden, suggested the administration needs to do more to emphasize how its auto-industry bailout has helped bring back jobs in the automobile and related industries. Biden himself made this a major point in his convention speech Thursday night.

Obama aides suggested that the jobs report reminds people of what they already knew -- that the economy is healing, but slowly.

White House senior adviser David Plouffe said despite Friday's jobs report, "we come out of the convention with momentum." But, he added, "that doesn't mean the race is going to change significantly."

The Romney campaign, enjoying a recent fundraising edge over the president, began airing a barrage of new ads shaped to fit the situations in different states and regions.

The weak August employment report "just goes to show that nobody in the administration really appreciated early on the depth of the hole we fell into in 2008," including Treasury Secretary Tim Geithner and former White House economic adviser Lawrence Summers, said Ross Baker, a political science professor at Rutgers University.

"It took 10 years to get out of the Great Depression," said Baker. He said people shouldn't be surprised "if this recovery is half as long."

Nigel Gault, chief U.S. economist for IHS Global, said that, if he were advising the Obama campaign, "I'd say we're still creating jobs, though not at a satisfactory pace. It shows how important it is to stick with us and let the policies we put in place bear fruit."

But, Gault added, "I'm more optimistic that whoever wins the presidency, the next four years will be much better than the past four years."

[Associated Press; By TOM RAUM]

Tom Raum covers economics and politics for The Associated Press.

Associated Press writers Alan Fram and Jim Kuhnhenn contributed to this report.

Follow Tom Raum on Twitter: http://twitter.com/tomraum.

Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.