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Weak March jobs report could spell trouble for Obama's reelection bid
The weaker-than-expected jobs figures released on Friday could spell trouble for President Obama’s reelection bid.
The Labor Department reported that the economy added 120,000 new jobs in March, falling well short of the more than 200,000 that had been expected. The unemployment rate dropped from 8.3 percent to 8.2 percent, but that decline came mostly from people giving up on their job searches.
The pace of job creation is central to Obama's chances in November, when the economy is likely to be the top issue for voters.
Obama welcomed the jobs gains at an event on Friday at the White House but conceded that "it’s clear to every American that there will still be ups and downs along the way and that we’ve got a lot more work to do.”
The president touted the jobs created during his time in office, saying the economy has added more than 4 million positions in the past two years, with more than 600,000 coming in the past three months alone.
But his likely opponent in the fall, GOP front-runner Mitt Romney, said the “weak and very troubling” report shows Obama’s economic policies are holding the country back.
"Millions of Americans are paying a high price for President Obama's economic policies, and more and more people are growing so discouraged that they are dropping out of the labor force altogether," Romney said in a statement.
"It is increasingly clear the Obama economy is not working and that after three years in office the president's excuses have run out.”
Although the economy has added 858,000 jobs since December, there are signs that job growth could sputter in the weeks and months ahead.
At their most recent meeting in March, members of the Federal Reserve’s Federal Open Market Committee (FOMC) said the labor market showed "substantial slack" and questioned whether jobs growth was outpacing the economy.
Federal Reserve Chairman Ben Bernanke, meanwhile, has warned that the economy is not growing fast enough to sustain the hiring gains.
Some Fed officials said that the labor market's perceived improvement could reflect businesses pulling back from the layoffs made during the recession, instead of a growing economy.
The economy has been showing positive signs in recent months with the service sector expanding and adding jobs, factories picking up hiring and production, companies buying more equipment and restocking inventories along with increased demand and improved consumer confidence.
But there is growing concern that rising gas prices are cutting into household budgets, making it more difficult for consumers to increase spending.
Whether the growth in the economy will be enough to overcome what is likely to remain a high level of unemployment — the Congressional Budget Office has predicted 8.9 percent unemployment for the year, while the central bank has projected between 8.2 percent and 8.5 percent — is still uncertain.
Economists cautioned against reading too much into the March jobs figures.
Alan Krueger, chairman of the president’s Council of Economic Advisers, said on MSNBC Friday morning that March's job gains "adds to the picture that economy is continuing to heal" but he acknowledged that there is still "a lot of work to do."
“It is important not to read too much into any one monthly report," he said, adding that there have been 25 straight months of job growth in the private sector.
The unemployment rate was 7.8 percent when Obama took office, and eventually reached 10 percent before beginning to drop last summer.
No president since Franklin Roosevelt has won reelection with an unemployment rate above 8 percent.
"Today’s report shows that families and small businesses are still struggling to get by because of President Obama’s failed economic policies," House Speaker John Boehner (R-Ohio) said in a statement.
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