Obama Says Job Growth a Positive Sign for Economy
President Barack Obama said a report showing businesses added workers last month is a “good sign” for the economy as he urged Congress to act on measures to help boost job creation.
In remarks after the Labor Department reported yesterday that private companies added 71,000 jobs last month, less than forecast, Obama said more needs to be done to accelerate growth. He made a plea for congressional action on his proposal to provide more loans and tax incentives to small businesses.
“Climbing out of any recession, much less a hole as deep as this one, takes some time,” Obama said after a visit to Gelberg Signs, a Washington, D.C., commercial sign fabricator that added workers under a law the president signed in March that provides small businesses with a tax break for hiring the unemployed.
Lawmakers must “rise above the election-time game and come together” to boost the recovery, the president said.
The Labor Department figures showed the seventh straight month of gains. Still, the increase was less than forecast and wasn’t enough to chip away at the unemployment rate, which was unchanged at 9.5 percent. Economists projected a 90,000 increase in private jobs, according to the median estimate in a Bloomberg News survey. Overall employment fell 131,000, reflecting the dismissal of temporary census workers.
While Obama sought to put the data in a positive light, stocks fell and Treasuries rallied because the report suggests the economy will be slow in recovering the 8.4 million jobs lost during the recession that began in December 2007.
The Standard & Poor’s 500 Index fell 0.4 percent to 1,121.64 at the 4 p.m. close in New York yesterday. The yield on the 2-year note was at .502 percent after falling to an all-time low of 0.4977 percent earlier in the day.
Disappointing
“It’s disappointing on its face,” Gus Faucher, an economist a director of Moody’s Analytics in West Chester, Pennsylvania, said of the jobs numbers. “We need to get above 150,000 new jobs per month to get unemployment down, and that’s not going to happen probably until the end of this year.”
The report will add to pressure on Obama and congressional Democrats as they try to convince voters the administration is on the right course to economic recovery.
“It’s a difficult argument for the Democrats,” Faucher said in a telephone interview. Lawmakers can cite an expanding economy but “until the voters see that jobs are picking up in a significant way -- and we haven’t had that yet -- they are going to be skeptical.”
Republican Criticism
Republicans seized on the data. Representative John Boehner of Ohio, the party’s leader in the House, said it was time for the president to “face up to the fact that his stimulus policies aren’t working.”
He warned that voters will rebel against a Democratic effort to add another $26 billion in spending to aid states struggling to pay for Medicaid and teachers’ salaries. Boehner called it “a political season pay-off to union bosses.”
Democratic leaders in the House are calling lawmakers back from recess next week to finish work on the legislation, which passed the Senate Aug. 5. Still pending is legislation to expand credit and cut taxes for small businesses.
Obama blamed Senate Republicans for “standing in the way” of passing the small business bill.
“We need to do what’s right, not what’s political, and we need to do it right now,” he said.
Turnaround
House Speaker Nancy Pelosi, a California Democrat, said the numbers showed a “sharp turnaround” from the job losses under former President George W. Bush, a Republican, and come “despite congressional Republicans fighting against the economic recovery every step of the way.”
Private employment in July was led by gains in manufacturing and education and health services, according to the department.
The economy has created about 654,000 jobs in 2010, with the largest gains in March and April, said Heather Boushey, senior economist at the Washington-based Center for American Progress, a research group whose views generally align with the White House.
“While this is an improvement over the last year, the rate of job creation remains less than about half of what it needs to be just to keep pace with population growth, let alone get the unemployed back to work,” Boushey said in a statement.
To contact the reporters on this story: Roger Runningen in Washington at rrunningen@bloomberg.net;
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