A smaller than forecast addition of 120,000 jobs last month broke a pattern that was giving U.S. voters a growing sense of security and boosting President Barack Obama as Republican Mitt Romney attacked his economic record.
The Labor Department reported today that employers added 120,000 jobs in March, after an increase of 227,000 the previous month. It was the fewest jobs added in five months. Unemployment fell to 8.2 percent, the lowest since January 2009, from 8.3 percent.
Obama said “we welcome” the added jobs and the decline in the unemployment rate. The economy’s created more than 4 million private sector jobs in the past two years, more than 600,000 in the past three months, he said.
“But, it’s clear to every American that there will still be ups and downs along the way and that we’ve got a lot more work to do,” the president said at a forum on women and the economy at the White House.
Romney said Obama has created a “stagnant” employment market.
“Millions of Americans are paying a high price for President Obama’s economic policies, and more and more people are growing so discouraged that they are dropping out of the labor force altogether,” the former Massachusetts governor said in a statement released by his campaign.
Today’s data showed unemployed workers left the labor force as Americans worked fewer hours and earned less on average per week.
“I’m nervous,” said Jared Bernstein, former chief economist for Vice President Joe Biden. The “downside surprise” may be “payback” for warm weather that boosted job creation in the early months of 2012, he said.
The chairman of the president’s Council of Economic Advisers, Alan Krueger, said “it is important not to read too much into any one monthly report.” There have been 25 straight months of job growth in the private sector, he said.
A rise in jobs bolsters household spending, which accounts for about 70 percent of the economy, even as those households are threatened by higher gasoline costs. Regular gasoline at the pump, averaged nationwide, rose 0.8 cent on April 4 to $3.936, according to AAA, the biggest U.S. motoring club. Prices have risen 20 percent this year and are 6.8 percent above a year ago.
Trend Toward Recovery
Still, there are signs the economy is on a trend toward recovery.
The unemployment rate has fallen from 9.1 percent in August. Consumer confidence climbed last week to the highest level in four years as brighter job prospects and an advancing stock market bolstered Americans’ view of the economy.
The Bloomberg Consumer Comfort Index rose to minus 31.4 in the period ended April 1, the best reading since March 2008, from minus 34.7 the prior week. All three of its components, the economy, personal finances and buying plans, advanced.
The Bloomberg consumer sentiment figures also showed some good news for Obama’s re-election bid. Democrats’ confidence rose to minus 25.2, and that of political independents increased to minus 29.1, both the best since 2007.
“Confidence is critical,” Ellen Hughes-Cromwick, chief economist at Ford Motor Co., said April 3 on a conference call with analysts.
Consumer-loan delinquencies fell in the fourth quarter as borrowers benefited from improving job and housing markets, the American Bankers Association said yesterday.
Total delinquencies in the 11 loan categories surveyed by the Washington trade group fell to 2.49 percent of all accounts, from 2.59 percent in the preceding quarter, the ABA said in its Consumer Credit Delinquency Bulletin. It marked the first quarter in eight years that all 11 loan categories fell.
Obama’s presidential rivals have criticized his stewardship of the economy, which has played a leading role in the Republican debates. The Republicans haven’t swerved from the main theme that the unemployment rate remains too high.
The economy has been central to Romney’s presidential campaign, as he criticizes the Obama administration for failing to pull the country out of the recession more quickly.
“He points out that he did not cause the recession, and that’s true,” the Republican front-runner said at an event in Milwaukee on April 2. “But he’s the one we looked to to end the recession and to lead a recovery, and he didn’t.”
Since World War II, no U.S. president has won re-election with a jobless rate above 6 percent, with the exception of Ronald Reagan, who faced 7.2 percent unemployment on Election Day in 1984.
“Unemployment, he said he’d keep under 8 percent -- itself a very high level, 8 percent -- he said he’d keep it under 8 percent if we let him borrow $787 billion, and it has not been under 8 percent since 37 months ago,” Romney said.
The $787 billion refers to the 2009 economic-stimulus package that Republicans say did little to jump-start the economy.
The labor market is still weak, so there’s still a case to be made, Phillip Swagel, a White House economist during President George W. Bush’s administration, said in an interview before the report.
“There’s a sense that this might be the best we’re going to see,” he said, with the unemployment rate still above 8 percent and an economy growing “maybe about 2.5 percent.”
“That means jobs growth will continue but moderate,” Swagel said. “It’s not enough” to reduce the jobless rate.
Swagel said another downturn in Europe, a surge in oil prices, another debt-ceiling showdown in Washington after the election or some other surprise shock could derail the nation’s slow recovery.
The Congressional Budget Office has predicted 8.9 percent unemployment for the year, while the Federal Reserve has projected between 8.2 percent and 8.5 percent.
The new report is “certainly disappointing,” said Chris Rupkey, managing director and chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York. “The president looked on much firmer ground talking about recovery in the labor market and today it’s a little shakier.”