The latest grim data on unemployment has dealt a new blow to US 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.
However, the latest data released on Friday showed the recovery is sputtering: A Labor Department report showed 131,000 jobs were lost last month and the unemployment rate remained stuck at 9.5 percent, which is better than the worst levels this year, but still painfully high.
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 this year 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. However, some economists are warning 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.
However, Republicans are waging their own campaign and blaming Obama for wasting a large part of the big US$787 billion 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.
Meanwhile, Americans cut borrowing for the fifth straight month in June, the Federal Reserve said on Thursday, as the US economic recovery showed signs of stalling.
Consumer credit fell 0.7 percent or US$1.3 billion in June to a total of US$2.42 trillion after larger declines of 2.6 percent in May and 6.4 percent in April, according to data from the central bank.
Most analysts had expected a bigger June decline of US$5.3 billion.
It was the fifth consecutive month of a fall in borrowings.
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.
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