It may not be long before U.S. President Barack Obama joins the swollen ranks of America's unemployed.
A government report released Friday showed no job growth in August.
President Obama is scheduled to address a joint session of Congress Thursday night with his latest proposals on how to reduce the nation's stubborn 9.1% unemployment rate.
He faces numerous obstacles, including a glum economic outlook that has held employers back from hiring, public dissatisfaction with how he has handled the economy, and an uncooperative mood among congressional Republicans who have spoken openly of making him a one-term president.
At this point everyone in Washington realizes that high unemployment is probably Obama's greatest obstacle to re-election in 2012.
"Our nation faces unprecedented economic challenges, and millions of hardworking Americans continue to look for jobs," President Obama wrote in a letter to congressional leaders requesting time for the speech. "It is my intention to lay out a series of bipartisan proposals that the Congress can take immediately to continue to rebuild the American economy by strengthening small businesses, helping Americans get back to work, and putting more money in the paychecks of the middle class and working Americans, while still reducing our deficit and getting our fiscal house in order."
Jobs Picture Bleak
The Bureau of Labor Statistics data released Friday was almost uniformly bad, with most categories either holding steady or getting worse.
Although private employers added 17,000 jobs, equal losses in the public sector, mainly from local governments meant that net job growth for August was zero - something that hasn't happened since World War II.
With economists forecasting a net gain of 75,000 jobs, the news sent stocks tumbling on Friday, with most indices down about 2%. Even if you add in 45,000 striking Verizon Communications Inc. (NYSE: VZ) employees, the number still fell well short of expectations.
Economists estimate job growth would need to hit 250,000 per month to bring unemployment down quickly; 125,000 new jobs are needed each month just to keep pace with population growth.
The official unemployment rate remained steady at 9.1%, but the U-6 number, which includes those who have not actively been seeking work, rose to 16.2% from July's 16.1%.
Adding insult to injury, the job growth numbers from the two previous months were revised downward. June's job increase fell from 46,000 to 20,000 and July's fell from 117,000 to 85,000.
"Though much attention is being paid to "zero job growth' in August, the real news in today's numbers is that job growth is worse than in recent months, and the nation continues to produce far fewer jobs than needed to meaningfully reduce the unemployment rate," Heidi Shierholz, economist at the Economic Policy Institute in Washington, D.C., said in a statement. "In fact, in some ways the report was less than zero in that weekly hours fell, as did hourly earnings."
Obama's Options
President Obama's jobs speech could be critical to his re-election effort. With his own economic team projecting that unemployment could remain at 9% through November 2012, he needs to convince American voters that he's at least trying to address the issue.
And that may be a tall order with a recent CNN poll showing 65% of American adults disapprove of how President Obama is handling the economy.
But what can he do that he hasn't tried already? Analysts expect President Obama's jobs speech to contain a few new ideas and several retreads of old ones.
Some possible proposals include:
- School-repair: This plan would set aside tens of billions of dollars for overdue repairs to public school buildings.
- New Worker Credits: The federal government could offer a tax credit of several thousand dollars to companies that increase their net number of workers.
- Job Training: The government could offer job-training programs for the long-term unemployed, modeled on a similar program in Georgia.
- Payroll Tax Break: The president has already mentioned his desire to extend through 2012 the reduction on the tax that workers pay into Social Security, which was reduced from 6.2% to 4.2% for 2011.
- Transportation: A White House blog said President Obama would include a renewed call for Congress to pass a transportation bill that will fund such projects as highway construction, bridge repair and mass transit.
Republican Opposition
The president's greatest challenge may be convincing budget-conscious Republicans in the House of Representatives to agree to anything that might cost money. However, White House press secretary Jay Carney promised last week that proposals in President Obama's jobs speech would be "paid for, absolutely paid for."
In a preview of the battle to come, Republican leaders pounced on Friday's poor job creation numbers.
The bad news shows that the president's "record on job creation and fiscal responsibility is abysmal," Rep. Paul Ryan, R-WI, told USA Today. "Since taking office, the president's policies have made a difficult situation worse."
One Tea Party Republican, Joe Walsh, R-IL, said he wouldn't even attend President Obama's jobs speech, preferring instead to host a small business forum in Illinois.
"I don't see the point of being a prop for another of the president's speeches asking for more failed stimulus spending and more subsidies for his pet projects," Walsh said in a statement.
Ultimately, it may not matter what President Obama says Thursday night with the majority of Republicans so obviously inclined to object to almost anything he proposes as they lay the groundwork for unseating him in 2012.
"[President Obama's jobs speech] can't change the fundamental fact of politics right now, which is that the two parties disagree on the most profound question in Washington," wrote Bloomberg View columnist Ezra Klein. "It's not: How do we fix the economy? It is: Who should win the next election?"
News and Related Story Links:
- Money Morning:
New Obama Job Creation Plan Coming Next Month - Money Morning:
U.S. Economy: Why The Republicans Want The Economy To Tank - Money Morning:
It's Not Just Congress - the System Has Failed - Money Morning:
Threat of Stagflation Looms as Prices Rise Despite Bad Economy - Bureau of Labor Statistics:
Employment Situation Summary - The White House Blog:
The Employment Situation in August - The Huffington Post:
Joe Walsh To Skip Obama Jobs Speech, Calls President 'Idiotic' - USA Today:
Obama jobs plan may call for repairing nation's schools - USA Today:
Obama and jobs: The key to re-election - Real Clear Politics:
No Sunshine for Obama in OMB's Economic Forecast - The New York Times:
Job Growth Halts, Putting Washington Under Pressure - Reuters:
White House sharply cuts growth forecast
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The last line of this analysis is the most important statement of this analysis. No matter what jobs creation bills President Obama proposes, the Republicans will shoot it down. They have no proposals of their own because they are not interested in improving the job situation or the overall economy of the U.S., they only want to make the President look bad so they can get a Republican president elected in 2012. And guess what, they still will not have a plan to get jobs for the unemployed after 2012 nor will they have any idea how to fix the economy. I know you are tired of hearing it, but this mess started with the Bush administration and the bank bailouts (which should not have happened) and big business and big banks are not interested in improving the economy or unemployment as long as they can continue their pockets. And they are still lining their pockets at the expense of the average American worker. Big business does not care about creating jobs in America as long as they can get cheaper labor overseas. After all, that only helps to drive the cost of labor down in the U.S. as people become desperate for jobs. And as long as the Republicans can fool the American people and blame the poor economy and dismal jobs outlook on the President, they are assured a victory in 2012. Are "we the people" going to be that stupid, or are we going to wise up and show the Republican Party that they were sent to Congress to represent the American people and not big business and the Republican Party interests.
Would be more interested in becoming a nation of socialism and loose all of your liberties.
People don't realize that whatever the U.S. government cuts from spending will cut jobs or increase individual spending for health or other things. (like a tax) The Republicans should state exactly what they would do to increase jobs instead of just critizcising Obama. I read that GDP will be going down because of future shortages of comodities including fertilizers, coal, oil, and others. Even if Republicans take over the government, unemployment will still be bad.
*What happened to the idea of investing in improvement of infrastructure?
*Apparently US roads, bridges, tel nets etc are in a poor condition, so that would be a useful.
*It will create jobs, and there is a lot of idle workforce available.
*The technical and managerial competence is certainly available.
*Since Government has no more money to spend, why not invite large and small corporations to take part in such an effort? It is said they have piles of idle cash.
*One question remains: how do private companies get a return on their investment in such infrastructure projects? American ingenuity can certainly solve that problem: toll booths for roads and bridges, access charges to net services, advertising, etc. Ask Jeff Immelt and other American corporate icons.
America is never short of ideas. Just keep the govmt out of it!
God bless America!
Einar, I agree that we need to work on fixing infrastructure and also education. And maybe business would be willing to invest in roads if they could get them as toll roads. However, that would probably be a bad idea because they would try to rape the American public in the process. Or the states would sell the contracts for toll roads to foreign companies and they would bring in their own workers. Any projects for infrastructure improvements (roads, railroads, water and sanitation treatment plants, mass transportation, etc.) should be specified to be American made and employ American workers and use American materials only. And all contractors should have to have their corporate offices based in the U.S.
It is unfortunate that the Republicans are all for spending (wasting)money in Iraq and Afganistan where most of the money spent winds up in the hands of corrupt foreign officials or corrupt U.S. subcontractors but won't spend a dime here in the U.S. where it will do the most good. The money spent here would come back three or fourfold with the increased spending of employed workers and the taxes they would pay, not to mention the fact that these employed workers would no longer be on the "government dole". Who knows, they may even be able to keep their home from foreclosure or afford to buy one of the many homes that the banks have foreclosed on and have for sale. Why, that might even help the housing market improve. I don't think we are improving the housing market in Iraq or Afganistan. Or maybe we are.
Maybe President Obama's jobs plan is not perfect, but it is better than the "trickle down" economics that have failed in the past. And I have seen no Republican plan that has any real jobs plan. They all want to depend on business to stimulate the economy, but business will not hire new employees until there are more consumers and there will not be more consumers until there are more employees put to work (whether they are financed by the government improvement programs or business programs). With government and business working together and Democrats and Republicans and the President working together, we might fix the economy. But if everybody wants to play politics then the American people will be the losers.
Einar Dahl – I agree with a lot of what you say, but God Bless America!!! Can you please tell me why should God bless America when in FACT this country along with the UK and Israel are behind much of the world's chaos? What about God blessing the likes of Darfur, Somalia, Palestine and several other places in the world that are much more in need of God's blessing? Please stop with the false sense of patriotism and self glory, the world is sick of it!
The more you look at reality, the more you inevitably are forced to the conclusion that not only has Obama failed, he has deliberately crashed the U.S. He has a hidden agenda that he hid to get elected. He is anti-business and anti-small business and this causes you to understand that he is anti-US. But he is shrewd enough to help his money cronies steal from the country so he can build a huge war chest to save his own job. I don't know whether the fear of disclosure of this treason will lead him to more anti-social actions, or whether he will simply become more and more desperate not to be found out, but in any event, our only hope is to elect a real president who cares about the country.
125,000 jobs are needed each month to keep pace with population growth? This is, at best, a lie of omission.
Obama is importing 125,000 foreign workers each month. That's not mandated by God, it's a policy choice. There is no reason we couldn't moderate this for a while. The reason for this forced population growth is to make certain that job growth is cancelled out by population growth. So wages stay low. And profits stay high. And that disgusting grifter Obama can be well rewarded by his rich rentier friends.