WASHINGTON – Bleak American jobs numbers for the month of May are spurring fears that the fragile U.S. economic recovery has sputtered to a virtual standstill — an ominous development for President Barack Obama just six months before the November election.
The U.S. economy added only 69,000 jobs in May, the puniest number of the year so far, while the unemployment rate ticked up a notch to 8.2 per cent from 8.1 per cent in April.
The new data is reflective of a steadily downward trend in job creation from the high of 227,000 jobs created in February.
Wall Street responded quickly to the dismal jobs numbers. The Dow Jones industrial average plunged more than 200 points, putting the index on track for its biggest single-day plummet since November.
In a campaign-style speech in Minnesota on Friday, Obama said his administration has long known that the road to economic recovery wouldn’t be smooth one.
“The economy is growing again but it’s not growing as fast as we want it to grow. We’ve got a lot of work to do until we get to where we need to be,” he said.
At a Honeywell plant in Golden Valley, Minn., where veterans returning from Iraq and Afghanistan have been hired, Obama vowed: “We will come back stronger. We do have better days ahead and that’s because of you.”
Not surprisingly, Republicans pounced on the bad news, saying it provides further evidence that the “job-killing” Obama presidency has been a grave failure.
The jobs report is a “harsh indictment” of Obama’s economic policies, Mitt Romney said in an interview on CNBC.
“It’s very bad news obviously for middle-class families of America,” said Romney, who clinched the Republican presidential nomination earlier this week.
“Their policies have not worked and in many respects their policies have made it harder for the economy to recover. I think that’s one of the reasons why people are looking for a new direction.”
In a statement, Romney went even further.
“This week has seen a cascade of one bad piece of economic news after another. Slowing GDP growth, plunging consumer confidence, an increase in unemployment claims, and now another dismal jobs report all stand as a harsh indictment of the president’s handling of the economy,” he said.
He also mocked Obama’s one-word campaign slogan, “forward.” Instead, he said, the United States is moving backwards thanks to the president’s economic policies.
A top White House economic adviser was quick to push back in the face of the disappointing numbers, saying the long-term problems Obama inherited from the George W. Bush administration were not going to be solved “overnight.”
Alan Krueger, chairman of the Council of Economic Advisers, added Americans should not get too discouraged by a solitary monthly report.
“We are still fighting back from the worst economic crisis since the Great Depression,” he said in a statement.
“Monthly employment and unemployment figures can be volatile, and employment estimates can be subject to substantial revision. Therefore, it is important not to read too much into any one monthly report and it is helpful to consider each report in the context of other data that are becoming available.”
The U.S. economy, for example, has added private sector jobs for 27 straight months, Krueger pointed out, for a total 4.3 million payroll jobs over that period. Prior to that, it had bled eight million jobs at the height of the recession, when Bush was still in office.
Nonetheless, there’s little doubt a stalled economic recovery poses a serious threat to Obama’s re-election prospects and contributes to perceptions that his administration can’t get a handle on how to spur growth.
White House officials have long argued that Obama’s stimulus spending prevented the economy from falling into a full-fledged depression, but have faced difficulties trying to prove they stopped something that didn’t happen.
For weeks, Obama’s campaign has been trying, without much success, to challenge Romney’s assertion that he has the economic gravitas that the president sorely lacks. They have questioned his job creation record as Massachusetts governor and attacked his work at the helm of private equity firm Bain Capital.
But Friday’s job report all but mutes that message, says one political expert.
American voters have long judged the incumbent president when it comes to the economy, and when suffering, have little sympathy for whatever situation he may have inherited. That means a president’s rival for the White House doesn’t need to do much more than point at the bad news, says Andrew Smith, a political scientist at the University of New Hampshire.
“These numbers are really problematic for Obama, because it makes it so much easier for Romney to make the case that the president has failed,” he said Friday.
“Romney doesn’t have to argue that he’d do it better, that he’d fix the mess — he simply has to say Obama has failed to fix it. He’s in a much better position, because how can Obama effectively argue that he has the winning formula now? Bad news is good news right now for the Romney campaign.”
Republicans, indeed, say the election will amount to a referendum on Obama’s handling of the economy.
John Boehner, the speaker of the House of Representatives, said Friday that the new jobs report should make it clear to Americans how they should cast their ballots in November.
“Republicans have a plan for America’s job creators designed to remove the government barriers holding back economic growth and hurting job creation,” he told a Capitol Hill news conference, in which he dubbed the new jobs report as “the sad new normal.”
“It’s clear that the policies that we have seen are not working.”