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Posted at 11:22 AM ET, 09/02/2011

August jobs report is more bad news for Obama

(This was updated at 12:58 p.m.)

New data released Friday that showed job growth at a standstill last month signaled more bad news for President Obama as he prepares to deliver a high-stakes speech to Congress on boosting the economy next week.

Labor Department figures showed zero net jobs created in August and unemployment holding steady at 9.1 percent. Black unemployment rose from 15.9 percent to 16.7 percent.

“Clearly, faster growth is needed to replace the jobs lost in the downturn,” Katharine Abraham, a member of the White House’s Council of Economic Advisors, said in a statement released by the administration. “Next week, the President will lay out a series of additional bipartisan steps that Congress can take immediately to put more money in the paychecks of working and middle class families; to make it easier for small businesses to hire workers; to put construction crews to work rebuilding our nation’s infrastructure; and other measures that will help the economy grow while still reducing our deficit and getting our fiscal house in order.”

Obama was scheduled to leave for Camp David on Friday for two days before heading to Paterson, N.J., on Sunday to see the damage caused by Hurricane Irene last week. The president, who had been scheduled to leave the White House at 10 a.m., delayed his departure for 2 1/2 hours, though his aides did not explain why.

Shortly after 12:30 p.m., Obama, walking with daughter Sasha, boarded his Marine One helicopter without saying anything about the jobs report to reporters who were watching.

“Today’s disappointing unemployment report is further proof that President Obama has failed,” GOP presidential candidate Mitt Romney said in a statement. “President Obama oversaw an economy that created zero jobs last month and that is unacceptable. In order to change the direction of this country, we need to change presidents.”

In his own statement, Majority Leader Harry Reid (D-Nev.) said: “The only acceptable jobs report is one that shows unemployment falling and Americans going back to work.”

Obama will present his jobs plan to a special joint session of Congress at 7 p.m. Thursday. It comes at a critical time.

Obama’s approval ratings in recent polls have dropped below 40 percent, an all-time low for him. Unemployment remains high, and the stock market has been volatile. A Wall Street ratings agency downgraded the nation’s credit rating one notch from AAA to AA+ last month after a bruising fight between Obama and Congress over how to raise the nation’s borrowing limit and reduce the deficit.

According to administration officials and others familiar with the White House plan, Obama is considering a tax cut that would directly reward companies for hiring new workers; new spending for environmentally friendly construction and for rehabilitating schools; and clean-energy tax cuts, The Washington Post reported earlier this week.

He is also developing programs to target long-term unemployment, which could include a version of a Georgia unemployment insurance program that pays employers to hire workers who have been unemployed and provides funding for training.

At the same time, Obama may announce new programs to lift the housing market, such as a refinancing initiative that could pump tens of billions of dollars into the economy.

Obama also is likely to repeat his call to renew — and potentially expand — the payroll tax cut.

House Republicans have vowed to oppose any new spending and say they will come up with their own plans.

And House Majority Leader Eric Cantor (D-Va.) said: “The President says he wants to put job creation first and put politics aside. We agree. It is a two way street, and if the President is willing to roll up his sleeves and join us in helping get Americans back to work, we are ready to work together.”

House Minority Leader Nancy Pelosi (D-Calif.) said in a statement: “With President Obama set to address the nation on his jobs agenda next week, Democrats and Republicans must act on a bipartisan basis now.”

***

Here is White House economic adviser Abraham’s full statement, posted on a White House blog Friday:

Today’s employment report shows that private sector payrolls increased by 17,000 and overall payroll employment was flat in August. The unemployment rate remained unchanged at 9.1 percent, a level that remains unacceptably high. Despite a slowdown in economic growth from substantial headwinds experienced throughout the year, the economy has added private sector jobs for 18 straight months, for a total of 2.4 million jobs over that period.

Clearly, faster growth is needed to replace the jobs lost in the downturn. Today’s report underscores the President’s call for Congress to pass a clean extension of the transportation bill to keep workers on the job and keep critical highway construction, bridge repair, mass transit and other important projects moving forward. Next week, the President will lay out a series of additional bipartisan steps that Congress can take immediately to put more money in the paychecks of working and middle class families; to make it easier for small businesses to hire workers; to put construction crews to work rebuilding our nation’s infrastructure; and other measures that will help the economy grow while still reducing our deficit and getting our fiscal house in order.

Sectors with employment increases in August included health care and social assistance (+35,500) and professional and business services (+28,000). Sectors with employment declines included information (-48,000, which includes striking Verizon workers), construction (-5,000), and manufacturing (-3,000). Local government lost 20,000 jobs and has shed 398,000 jobs since February 2010. State government added 5,000 jobs as an estimated 22,000 furloughed Minnesota state workers returned to work.

The monthly employment and unemployment numbers are volatile and employment estimates are subject to substantial revision. Therefore, as the Administration always stresses, it is important not to read too much into any one monthly report.

By  |  11:22 AM ET, 09/02/2011

 
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