Latest jobs data is blow to Obama as elections loom

WASHINGTON, Aug 6, 2010 (AFP) - The latest grim data on unemployment has dealt a new blow to President Barack Obama as he struggles to maintain his party's majority in Congress in November elections.

Obama, who has been hurt by the Gulf of Mexico oil disaster, has been scrambling to highlight his economic management in helping lift the US economy out of its worst slump in decades.

But the latest data released Friday showed the recovery is sputtering: A Labor Department report showed 131,000 jobs were lost in July and the unemployment rate remained stuck at 9.5 percent, which is better than the worst levels this year but still painfully high.

(AFP file) A man uses a computer to fill out paperwork at an employment centre in Oakland, California.

The private sector created a modest 71,000 jobs for the month, which was not enough to offset the massive government layoff of 143,000 census-takers.

Overall economic growth slowed to a pace of 2.4 percent in the second quarter of 2010, and other economic indicators are soft, even though Obama points to four quarters of economic growth.

The White House has dismissed the likelihood of a double-dip recession but some economists warm of a Japanese-style economic stagnation.

Obama tried to put the best face on the most recent employment figures.

"Climbing out of any recession, much less a hole as deep as this one takes some time. The road to recovery doesn't follow a straight line. Some sectors bounce back faster than others," Obama said.

Obama said the data showed jobs growing in the private sector for seven consecutive months.

"That's a good sign. Meanwhile our manufacturing sector that's been hit hard for as long as folks can remember has added 183,000 jobs this year. That's the most robust seven months of manufacturing growth in over a decade," he said.

"But for America's workers, families, and small businesses, progress needs to come faster. Our job is to make sure that happens."

Obama said the latest figures underscored the need for final passage of a bill aimed at saving 160,000 teaching jobs, which has cleared the Senate, and for other measures favoring small business.

"We need to decide whether we're willing to do what it takes to keep this economy moving in the right direction... but also to secure a clean energy future and accelerate our recovery and rebuild our economy around three simple words, 'made in America.'"

But Republicans are waging their own campaign and blaming Obama for wasting a large part of the big 787 billion dollars in stimulus funding approved a year ago. It remains unclear whether the opposition party will be able to block any new stimulus efforts sought by the White House.

With the recovery appearing to falter, two key members of the Obama economic team are on their way out. Budget director Peter Orszag announced his departure in June and top economic aide Christina Romer said on Thursday she would return to teaching.

Obama continues to press his case, hitting the road to tout the rebound in the US auto sector, the finance reform and the huge health care reform measures approved this year.

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