August jobs report threatens to steal Obama’s thunder

CHARLOTTE, N.C. — A new jobs report that will be released Friday morning threatens to spoil President Obama’s triumphant week at the Democratic National Convention.

Friday’s jobs report will be one of the last before voters head to the polls in November, and comes just as the presidential campaign reaches the home stretch. 

The news on the unemployment rate will drop less than 12 hours after Obama’s acceptance speech in Charlotte, N.C., and could prove deflating for Democrats after a convention that seemed to energize them for the fight ahead against Republican nominee Mitt Romney. 

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Economists expect the jobs report to show that employers hired around 150,000 new workers last month, a modest sum that is unlikely to cut into the nation’s 8.3 percent unemployment rate.

"The 150,000 job gain will be politically neutral, not weak enough to help Romney and not strong enough to support Obama’s reelection," said Mark Zandi, chief economist for Moody's Analytics.  

But the jobs report might not be the momentum killer for Obama that many predict, and could provide a surprising lift for the president if the numbers beat expectations. 

The ADP National Employment Report showed that the private sector added 201,000 jobs in August, and found that employers hired more people than initially estimated in July. 

In addition, first-time unemployment benefits fell by 12,000 last week and the service sector grew last month with hiring growing at a faster clip, shifting from contracting to expanding. 

The jobs figures are of crucial importance to Obama’s campaign, as his reelection could hinge on whether voters feel that the country’s economy is headed in the right direction. 

The president is trying to overcome a weighty history, as no president since Franklin Roosevelt has been reelected with an unemployment rate above 8 percent.

Romney says Obama's failures in the White House warrant a change in leadership, and argues he’s the candidate with the business background needed to bring the country out the economic doldrums. 

Although the economy is the top issue in the election, no major improvements are expected before November, especially with the housing market just starting to get back on its feet and with ongoing layoffs in state and local government continuing.

Austan Goolsbee, a former chairman of the Council of Economic Advisers under Obama, said he had some concern that a poor jobs report could blunt the president’s momentum coming out of Charlotte.

But Goolsbee and other Democrats also said that voters’ perception of the economy — with an unemployment rate above 8 percent for almost all of Obama’s presidency — is mostly fixed in place.

“I don’t know other than the real business economic and the political kind of junkies, how close people follow those individual [jobs] numbers,” said Goolsbee, who said that he thought only a very positive or negative report could really move the needle.

Rep. Chris Van Hollen (Md.), the top Democrat on the House Budget Committee, said he fully expected another net positive when it comes to private sector jobs, and used that to push back on the GOP narrative that Americans are not better off than they were four years ago.

“That’s a whole lot better than losing 800,000 jobs every month, which is what the president inherited,” said Van Hollen, a frequent sparring partner with Rep. Paul Ryan (R-Wis.), the GOP nominee for vice president.

The Maryland Democrat also blamed Republicans for blocking Democratic policies aimed at job creation, but acknowledged that the White House and lawmakers don’t have many tools left to spark the economy in the two months before Election Day.

“I’m not sure you would be able to see dramatic changes, but you could see greater confidence in the economy if there was a willingness for Republicans to work with us,” he said.    

— This story was updated at 7:45 p.m.