WASHINGTON — U.S. employers likely added jobs last month, though probably not enough to push down the unemployment rate. A tepid report Friday on hiring in August would provide little momentum to President Barack Obama's election campaign a day after his speech to the Democratic convention.
Analysts
forecast that the economy generated 135,000 jobs last month and the
unemployment rate remained 8.3 percent, according to a survey by
FactSet. That’s below the 163,000 jobs gained in July, but an
improvement from meager hiring in the spring.
In his speech
Thursday night, Obama acknowledged incomplete progress in repairing the
still-struggling economy and asked voters to remain patient.
But economists were encouraged Thursday after several reports suggested hiring could pick up in the coming months.
Fewer
people applied for unemployment benefits last week, the government
said. And companies boosted hiring in August, according to a private
survey. A third report showed that service sector companies, such as
hotels, retailers, and financial services firms, expanded at a faster
rate last month.
The stock market jumped, mostly in response to an
announcement by the European Central Bank that it will buy more
government bonds in an effort to ease the region’s financial crisis. The
Dow Jones industrial average soared 245 points to its highest level
since December 2007.
Friday’s unemployment and hiring figures will
be among the most politically consequential of the campaign. They
arrive just as the presidential race enters its final stretch. Jobs are
the core issue, and the report could sway some undecided voters.
There
will be two additional employment reports before Election Day Nov. 6.
But by then, more Americans will have made up their minds.
“It’s
the most important economic data point we have between now and Election
Day,” said Tony Fratto, a White House spokesman under President George
W. Bush.
Despite its political significance, Friday’s jobs data is unlikely to signal major improvement in the still-sluggish economy.
But
it will likely provide both sides with fodder for their campaigns.
Republican nominee Mitt Romney, the wealthy former Massachusetts
governor, has pointed to 42 straight months in which unemployment has
exceeded 8 percent.
At the same time, Friday’s report will almost
surely mark a 30th straight month of private-sector job gains, a point
Obama and his allies are certain to spotlight.
“The president’s
supporters will say, ‘See, it’s improving,’ and the supporters of Gov.
Romney will say, ‘See, it’s not improving fast enough,'” said Robert
Shapiro, an economist and former trade official under President Bill
Clinton.
The biggest threat to Obama would be a rise in the
unemployment rate, the most visible economic statistic for most voters.
The rate is the same now as it was in January.
For the White
House, a higher rate could offset any political benefit from slow but
consistent job creation. Voters are likely to ask, “If you’re creating
jobs every month, why is the rate going in the wrong way?” Fratto said.
A
drop in unemployment, meanwhile, would help Obama focus on social
issues that might play better with the independent voters he needs in
battleground states. Polls show Obama has an edge on Romney on social
issues, while Romney has a slight advantage on the economy.
“It
makes it easier for the president to continue attacks on women’s health
care, immigration and every other differentiation with Republicans,”
said Hank Sheinkopf, a Democratic strategist.
Thursday’s
government data on the job market exceeded economists’ expectations.
Weekly applications for unemployment benefits fell 12,000 last week to a
seasonally adjusted 365,000. And ADP, a payroll provider, estimated
that companies added 201,000 jobs last month, the most since March.
A
third report found that service sector companies expanded at a faster
pace last month. The Institute for Supply Management, a trade group of
purchasing managers, said its services index rose to 53.7 from 52.6 in
July. Any reading above 50 indicates expansion. Service businesses such
as stores, hotels and financial companies reported sharp hiring gains.
Still,
the ISM’s report hasn’t always closely matched the government’s more
authoritative employment report. And the ADP survey covers only
private-sector hiring.
At least 200,000 jobs a month are needed to
lower the unemployment rate. The economy has averaged only 150,000 new
jobs a month since the start of 2011.
“Clearly, this is not an economy on track to the fast lane,” said Chris Jones, an economist at TD Bank.
A
weak employment report could nudge the Federal Reserve to announce some
new action to boost growth after its meeting next week.
