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Economic News Isn't Helping Bush
Job Growth Up Sharply in July, but Polls Show Dissatisfaction

By Jonathan Weisman and Nell Henderson
Washington Post Staff Writers
Saturday, August 6, 2005

U.S. job growth jumped last month and the unemployment rate held steady at 5 percent, the government reported yesterday, the latest economic data to show the economy picking up steam.

Yet President Bush's economic approval ratings remain low, weighed down by anger over Iraq and concerns about lackluster wage increases and stubbornly high gasoline prices.

"I feel the economy is just not as good as it should be," said Adam Judis, 40, a Pasadena, Calif., computer consultant and political independent. "We're spending too many lives, resources and money on Iraq. There has to be a point where we say we can't help everybody. We need to help ourselves."

Employers added 207,000 jobs in July, the biggest monthly gain since April. And job growth was stronger than previously reported in May and June, said the Labor Department, which added a combined 42,000 jobs to its earlier estimates.

Factory orders are climbing, and businesses are investing more in new equipment and software. Inflation is tame except for energy costs, and interest rates remain low. The economy expanded at a 3.4 percent annual rate in the spring, and analysts see the pace quickening this summer.

The labor report provided "yet more evidence that growth is accelerating," said Nigel Gault, U.S. economist at Global Insight Inc., a research firm.

Yet a CBS News poll released this week found that 52 percent of respondents disapproved of Bush's handling of the economy, while 42 percent approved. Those numbers were worse than his overall approval rating, which split with 46 percent disapproving and 45 percent approving. Just 20 percent of those polled said the economy is improving; 32 percent said it is getting worse.

The disconnect has not been lost on the White House. The president's radio address this morning will be devoted to good economic news. On Monday, he will sign a 10-year, $12.3 billion energy bill, emphasizing its economic impact. On Tuesday, the White House economic team will travel to the president's ranch in Texas to discuss how all Americans can prosper from economic growth, said Trent Duffy, a White House spokesman. And on Wednesday, over the protest of budget-watchdog groups, Bush will sign a $286 billion transportation bill that he says will boost economic productivity by reducing congestion, shortening commuting time and improving safety.

Duffy said that the White House is well aware of the president's polling numbers but that they are refuted by a surge in consumer spending, especially on big-ticket items such as cars and houses.

"They're putting their money where their mouth is," Duffy said.

Average hourly wages for most workers rose 6 cents in July, to $16.13, the biggest monthly increase in a year, the Labor Department said. The figures are for production and non-managerial workers, who make up 80 percent of the labor force. Average weekly wages rose $2.02 in July, to $543.58.

The biggest job gains were reported by retailers, which added nearly 50,000 workers, or about one-fourth of the total. About 10,000 of those hires were made by auto dealerships, which were flooded with customers eager to take advantage of promotions.

The July job gains were shared among racial and ethnic groups. The unemployment rate for whites was unchanged at 4.3 percent. The rate for blacks fell to 9.5 percent from 10.3 percent in June, and the Latino rate was 5.5 percent, down from 5.8 percent.

Ray Phelan, 68, a Republican accountant in Daytona Beach, Fla., said Bush is getting a bum rap on an economy that, as far as he can see, is booming. "The economy is great," he said. "I think the best thing the president can do for the economy is keeping a positive image out there."

But Bush still may have a tough sell, said Celinda Lake, a Democratic pollster. The good numbers, she said, don't match the experience of voters who continue to fret over the job market, fear global competition and struggle to keep up, especially as gasoline prices remain well above $2 a gallon and health care costs continue to rise.

That perspective was backed by interviews with voters across the country who answered a recent Washington Post-ABC News poll and agreed to discuss their responses.

Jerry Lee, 55, an electrical engineer and political independent in Austin, was laid off three years ago when his company, Cirrus Logic Inc., began hiring engineers in China. As a worker displaced by international trade, he qualified for a year-long, federally funded job retraining course, lived for six months on unemployment benefits and applied for at least 200 jobs. He is still jobless; engineering positions come up only for those trained to help the housing boom, he said -- civil, structural or land-use experts. And qualified applicants are plentiful enough that companies see no need to retrain a semiconductor expert, even one with 30 years of experience and a master's degree.

Applications "just drop into a black hole and go away," Lee said.

Positive as it was, yesterday's economic news did indicate some concerns. Higher energy costs in the past year have meant that wage gains barely outpaced inflation.

"Incomes rose solidly in July," said Stuart G. Hoffman, chief economist for PNC Financial Services Group. But, he said, "much of that extra income went into their gas tanks since gasoline prices rose by close to 7 percent" last month.

Peg Dameron, 51, a Republican nurse in Guilderland, N.Y., said she voted for Bush in 2000 but is disenchanted over Iraq, health care issues and a failure to raise the minimum wage. "We're just belittling the poor," she said.

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