Friday morning’s release of an unimpressive August jobs report certainly won’t diminish all of the momentum President Barack Obama had generated at this week’s Democratic National Convention in Charlotte, but it certainly tapers things down somewhat.
Democrats were hoping for better news as they head into the pivotal final 60 days before the November presidential election. They had hoped to begin the final stretch with improved numbers that would further affirm the president’s contention that things are steadily improving.
According to the Department of Labor report, the U.S. economy added just 96,000 jobs in August, while the unemployment rate dipped only modestly from 8.3 percent to 8.1 percent.
The lower-than-expected numbers figure to immediately become a heated political football as both Obama and Mitt Romney, his Republican rival, are both keenly aware that jobs and the economy rank as the two biggest concerns among voters. There are two more monthly Labor Department reports due before the Nov. 6 election.
No president since the Great Depression has won re-election when the jobless rate was higher than 7.4 percent.
The unemployment rate is expected to remain above 8 percent by the election, and probably by the end of the year as well.
The drop in unemployment was attributed to 368,000 people who stopped looking for work and therefore were no longer counted in the survey.
“These numbers are not very strong,” said Joseph LaVorgna, chief U.S. economist at Deutsche Bank. “The job market is improving, but only gradually.”
The news comes after both presidential candidates and their parties used their conventions to further drive their preferred economic narratives. Republicans insist that Obama’s policies have failed, while Democrats counter by pointing out that the economy Obama inherited was too severely damaged to be fully repaired this quickly.
The evidence seems to give credence to this argument as the economy has added 3.8 million jobs since employment bottomed out in February 2010. There are still 4.8 million fewer total non-farm jobs since before the recession started during the presidency of George W. Bush.
The same applies to the unemployment rate as well, which is down from over 10 percent only a couple years ago. Yet, it has remained above eight percent for over three years, the longest stretch since monthly records began in 1948.
Prior to the start of the recession, the unemployment rate was five percent. Experts say it will take approximately three to four years to return to that level.
But the recovery’s slow pace will make things challenging politically on President Obama between now and November.