Republican Mitt Romney seized on the slowest reported jobs growth in five months, saying President Barack Obama’s economic policies have failed and “the president’s excuses have run out.”
The Labor Department said yesterday that employers added 120,000 jobs in March, after an increase of 227,000 in February. It was the fewest jobs added in five months. Unemployment fell to 8.2 percent from 8.3 percent as discouraged workers left the labor force.
Obama said the added jobs and the decline in the unemployment rate were “welcome.” The economy’s created more than 4 million private sector jobs in the past two years, and 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 the White House.
Romney, seeking to emerge as the likely Republican nominee, said the report gives Americans new evidence to vote for him instead of Democrat Obama. The jobs growth was less than the most pessimistic estimate in a Bloomberg News survey of economists.
“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. “It is increasingly clear the Obama economy is not working and that after three years in office the president’s excuses have run out.”
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.
Chris Rupkey, managing director and chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York, called it “a speed bump on the road to recovery.”
“It throws cold water on this idea that, hey, we’ve got this great recovery,” said Peter Schiff, chief executive of Westport, Connecticut-based broker- dealer Euro Pacific Capital Inc., with more than $3 billion in customer accounts.
S&P 500 futures expiring in June slumped 1.1 percent to 1,374.90 at 11:42 a.m. following the benchmark index’s 0.7 percent weekly loss. All stock exchanges in the U.S., Western Europe, Canada and Brazil were closed for Good Friday. Yields on 10-year Treasuries fell to 2.05 percent from 2.18 percent.
The evidence of a sluggish recovery heightens a potential threat to Obama’s re-election campaign, said Ken Duberstein, chief of staff to former President Ronald Reagan.
‘Danger for Obama’
“The trajectory has to be firmly in favor of major job creation and obviously it’s not. That’s the danger for Obama,” Duberstein said.
Today’s data showed unemployed workers left the labor force as Americans worked fewer hours and earned less on average per week. Employment in the retail industry fell 34,000, the biggest drop since October 2009.
“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.
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, the big-picture story is of an economy on a trend toward recovery. Bernstein said average job gains of the past three months still exceed 200,000, and John Podesta, former chief of staff to President Bill Clinton said, “You can’t live or die over these one-month figures.”
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.
No ‘Champagne Corks’
“Confidence is critical,” Ellen Hughes-Cromwick, chief economist at Ford Motor Co., said April 3 on a conference call with analysts.
Job creation and growth in the economy continues to be “decent,” Podesta said on Bloomberg Television. “No one’s going to pop the champagne corks over this report but we continue to go in the right direction.”
The economy has been central to Romney’s presidential campaign, as the co-founder of Bain Capital LLC criticizes the Obama administration for failing to pull the country out of the recession more quickly.
Obama “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 Republican Reagan, who faced 7.2 percent unemployment on Election Day in 1984.
“There’s a sense that this might be the best we’re going to see,” with the unemployment rate still above 8 percent and an economy growing “maybe about 2.5 percent,” said Phillip Swagel, a White House economist during Republican President George W. Bush’s administration in an interview before the report’s release.
“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 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.
Chris Rupkey, the managing director and chief financial economist at Bank of Tokyo-Mitsubishi UFJ Ltd in New York, said, “The president looked on much firmer ground talking about recovery in the labor market and today it’s a little shakier.”