July Jobs Data Turns Up Heat on Democrats


Friday's jobs report earned congressional Democrats a fresh drubbing from their Republican opponents, as both sides gear up for mid-term elections already expected to result in losses for members of President Barack Obama's party.

Private-sector payrolls rose by a weaker-than-expected 71,000 in July, the Labor Department reported, while nonfarm payrolls fell by a seasonally adjusted 131,000. The unemployment rate stayed at 9.5%.

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Friday's number underscored the risk to Democrats of a still-weak economy, as they face a tough year with losses projected in both the House and the Senate.

"The Republican team benefits from a bad unemployment rate," says Peter Brown, assistant director of the Quinnipiac University Polling Institute. "Unemployment is issue No. 1, issue No. 2 and issue No. 3," says Brown. "It's everything."

Recent Quinnipiac polling demonstrates the importance of jobs to voters. A July 22 poll found that American voters favor reducing unemployment over reducing the federal budget deficit by a 64% to 30% margin. Even Republicans said that cutting joblessness was more important. Brown says he thinks little has changed since that poll was released.

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There are only two more jobs reports before Election Day, so politicians are increasingly posturing under the assumption that there will be little fundamental change on the jobs front by November.

(Even the White House, in its mid-session review of the economy, predicted that the jobless rate will average 9.7% this year.)

Obama and Democrats credit the stimulus package and the auto industry bailout, among other things, with saving millions of jobs. Republicans, meanwhile, are pressing for extending tax cuts set to expire at the end of this year. They argue job creation will suffer if taxes rise on anyone.

The Republicans made their case again Friday morning.

"After another disappointing jobs report and the resignation of one of the chief architects of the trillion-dollar 'stimulus,' it's time for President Obama to listen to the American people and face up to the fact that his 'stimulus' policies aren't working," said House Republican Leader John Boehner of Ohio. Boehner was referring to the resignation of Council of Economic Advisers Chair Christina Romer, who said Thursday night that she's going back to teach at the University of California, Berkeley.

Meanwhile, Labor Secretary Hilda Solis defended the administration's policies in a CNBC interview on Friday, saying the country is adding jobs in manufacturing, health care and transportation. Next week, House Democrats plan to return to Washington and pass a bill that they say will create or save nearly 300,000 American jobs in areas like law enforcement and education.

Republicans, of course, say that bill is a ploy aimed at getting votes in November. Democrats say it will support education, family health and neighborhood safety.

Robert Schroeder is a reporter for MarketWatch in Washington.


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