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ROBERT TRIGAUXUnless 372,000 new jobs a month turn up in August, September and October, Bush will suffer the first net loss since Hoover - and a threat to his re-election.
If you listen to one politician, America has come to a curve in the economic road. If you listen to another, the country is winding into a full-fledged U-turn.
Bullish economists are eating humble pie this week after government reports announced Friday that the U.S. economy sputtered ahead in July by an underwhelming 32,000 new jobs - about 200,000 fewer than expected. President Bush is looking for a silver lining amid the surprisingly weak job data, and Democratic contender John Kerry is renewing his charge that the lackluster jobs market needs new blood in the White House.
In campaign remarks, Kerry responded to the tepid new job numbers, saying they show "that our economy may be taking a U-turn instead."
The direction of the economy in the three months before the Nov. 2 election will be critical for Bush and Kerry. Bush has coined a new catch phrase - "era of ownership" - to rechristen the economic thrust of his campaign, even though the strong growth in new jobs long promised by his advisers has largely failed to appear. Kerry's campaign pitch last spring of a "jobless recovery" lost traction when the U.S. economy began generating solid numbers of new jobs. But as the volume sags, that message may find new life.
Among recent U.S. presidents, Bill Clinton, Ronald Reagan and Jimmy Carter all enjoyed double-digit gains in new jobs, dominating the post-World War II era, during their terms in office. (Bush's father, George Bush, saw a modest 2.5 percent increase in new jobs during his one term as president.)
Barring a major economic resurgence before November, Bush will become the first president since Herbert Hoover to suffer a net loss of jobs during his administration. To break into the plus side before Election Day, Bush will need 372,000 new jobs created in each month of August, September and October.
That economic burst seems unlikely. It does not help either candidate that businesses seem unsure of expanding or hiring, even more so in light of the recent record-high oil prices and fresh terrorism threats. A Bloomberg survey of economists Monday shows them trimming their forecasts for U.S. growth in the quarter.
July was the 11th month in a row that the economy added jobs. But it was also the fourth consecutive month that the number of new jobs nationwide has declined. July's 32,000 net jobs followed a gain of 78,000 jobs in June and 208,000 jobs in May.
The troubling trend raises the question of whether the next new job numbers for August, a figure that will be made public in early September, will be lower than July's - perhaps even negative.
The Federal Reserve meets today to consider a widely anticipated increase in interest rates. But it may now rethink any action on rates in light of the weaker jobs picture.
So where are the handful of new U.S. jobs?
Among the 32,000 created in July, 10,000 were created by manufacturers. Similar gains were reported in the health care and temporary employment fields as well as the professional and business service sectors of the economy.
Those gains were offset in July by jobs shed by retailers (as consumer spending dipped), financial services businesses (as mortgage rates rose) and transportation equipment companies.
Job creation in most business fields, including energy, construction and publishing, remained mostly flat.
But the new job momentum that emerged last spring appears lost. The new jobs in March were more than 10 times the number created in July.
Even so, the unemployment rate still fell to 5.5 percent last month from 5.6 percent in June. That's the lowest rate since October 2001, and is at least one indicator suggesting the economy may be stronger than the monthly declines in new jobs.
Which indicator paints a more accurate economic picture?
The Labor Department uses two different surveys to come up with its monthly figures for national unemployment and newly created jobs. The unemployement rate is determined by surveying 60,000 households and asking people whether they have jobs or are looking for work.
A separate payroll survey used to calculate new jobs is based on information from about 160,000 businesses and government agencies, covering roughly 400,000 individual work sites. Economists look to the payroll figure as a better measure of the national market for jobs.
The bottom line? Bush is in a political situation eerily similar to what his father encountered in 1992 when he ran for, and lost, re-election. The voters will decide this fall whether jobs and the health of the U.S. economy are heading down the right road.
Robert Trigaux can be reached at trigaux@sptimes.com or 727893-8405.