July's U.S. Jobs Report a "Hammer-Blow" to President Obama's Re-Election Bid

After three months of weak job creation, a better-than-expected reading in July's U.S. jobs report was welcome, but still isn't anything to get too excited about. Despite the encouraging job gains, the unemployment rate actually ticked up.

The Labor Department reported U.S. payrolls increased by a seasonally adjusted 163,000 jobs in July, better than the 95,000 economists had expected. But, in a separate survey of U.S. households, numbers revealed the unhealthy unemployment rate actually eked up, rising from 8.2% to 8.3%.

"Today's increase in the unemployment rate is a hammer blow to struggling middle-class families," GOP presidential hopeful Mitt Romney said in a statement.

With the November presidential election growing near, the jobs report carries massive political weight.

Not since World War II has an incumbent president attempted re-election with an employment rate over 8%. Since President Obama took office, the unemployment rate has remained elevated and above that key level.

And it's not likely to go down before November.

"We've now gone 42 consecutive months with the unemployment rate above 8 percent," Romney said in a statement. "Middle-class Americans deserve better, and I believe America can do better."

July's U.S. Jobs Report: Point Romney

Several polls show Romney leads the president when it comes to economic issues, and this weak U.S. jobs report is a win for the Republican.

A USA Today/Gallup poll conducted in late July found 50% of Americans said Romney is the candidate who would be better at job creation, with 44% siding with the president.

While Democrats will pounce on the opportunity to highlight that Friday's numbers reflect the strongest hiring since February, Republicans will underscore that the report marks the highest unemployment rate since the same month.

Romney has vehemently reminded Americans that the U.S. economy under President Obama has been disastrous for middle-class Americans, pointing out that median household income has shrunk $2,900 and average weekly wages slumped last year for just the fifth time since 1978.

Andrea Saul, Romney's spokesperson, noted that Friday's report revealed unemployment rose in a whopping 90% of U.S. cities.

Hiring remains well below the robust pace enjoyed during the first few months of the year. From April to June, the economy added an average of 75,000 jobs a month, a steep drop-off from the 226,000 jobs per month added during the first three months of 2012.

Private companies were responsible for all of the growth in July payrolls, adding 172,000 jobs during the month. Governments discarded some 9,000 positions. Meanwhile, the federal workforce shriveled by 2,000.

Romney maintains that if elected, his policies will help boost the recovery and create jobs.

The Obama administration staunchly defends their record, stating that the U.S. economy is growing, but the reins have been tightened by lower government spending, Europe's mounting financial woes and political stalemates in Washington.

"While there is more work that remains to be done, today's employment report provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression. It is critical that we continue the policies that build an economy that works for the middle class as we dig our way out of the deep hole that was caused by the severe recession that began in December 2007," said Alan Krueger, chairman of the White House Council of Economic Advisors.

Looking ahead, President Obama's camp believes the best move now is to extend the Bush era tax cuts for the middle class, while letting them expire for the wealthiest Americans. Such a step, President Obama lectures, will help working families and reduce deficits.

Romney wants the tax cuts extended for all.

July's U.S. jobs report still managed to trigger a Wall Street rally. Immediately after the U.S. Labor Department released the report, the Dow Jones jumped 40 points, and just a half hour into trading was up more than 218.

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