Bloomberg News

Obama Says Jobs Report Shows Economy Has ‘Long Way to Go’

July 08, 2011

(Updates with Obama comments beginning in second paragraph.)

July 8 (Bloomberg) -- President Barack Obama said today’s job report shows that ‘we still have a long way to go and a lot of work to do to give people the security and opportunity they deserve.’’

“We still have a big hole to fill” in replacing jobs lost during the recession, Obama said in a statement from the White House Rose Garden.

The Labor Department reported the U.S. unemployment rate unexpectedly climbed to 9.2 percent, the highest this year, from 9.1 percent in May. Employers added 18,000 workers in June, the fewest in nine months.

Economists expected the numbers to show employers added 105,000 jobs in May, according to the median forecast in a Bloomberg survey.

Obama said Congress can quickly help create jobs by extending a payroll tax cut, hiring construction workers for infrastructure projects, approving pending trade agreements and passing a measure to streamline patent procedures.

The report may add urgency to talks on July 10, when Obama and eight bipartisan congressional leaders will try again to find a compromise on cutting deficits and raising the government’s $14.3 trillion debt ceiling to head off a default on U.S. debt obligations in early August.

Business Certainty

Agreement on raising the debt limit and cutting deficits reduction would “give our businesses the certainty they will need” to invest in creating new jobs,’’ Obama said.

Lingering effects of the Japanese tsunami and nuclear accident help explain a decline in average hourly earnings and a decline in the average workweek, said Michael Strauss, who helps oversee $27 billion as chief investment strategist at Commonfund in Wilton, Connecticut.

“The supply-channel disruptions didn’t get alleviated yet,” Strauss said. “They’re getting alleviated in Japan, but it’ll take another five to six weeks to get alleviated here.”

“We will see a turn of this in July and August,” he said.

“There are really not any positives to take from this,” said Gus Faucher, economist and director of Moody’s Analytics in West Chester, Pennsylvania. “I think that people are still nervous, consumers are still scared, businesses are still reluctant to hire.”

House Speaker John Boehner, an Ohio Republican, said a “misguided” $814 billion stimulus package, combined with business regulations and a mounting national debt “continue to hold back private-sector job creation in our country.”

Stocks sank, erasing most of a weekly gain for U.S. benchmark indexes, commodities slid and Treasuries jumped as slower-than-forecast job growth damped optimism about the economic recovery.

The Standard & Poor’s 500 Index sank 1.25 percent to 1,336.37 at 11:01 a.m. in New York. Oil slipped 2.1 percent to $96.58 a barrel, helping drag the S&P GSCI Index of commodities to a 1 percent drop. The 10-year Treasury yield decreased 10 basis points to 3.04 percent.

--With assistance from Sho Chandra and Bob Drummond in Washington, Stephen Kirkland in London and Nikolaj Gammeltoft in New York. Editors: Bob Drummond, Laurie Asseo

To contact the reporter on this story: Roger Runningen in Washington at rrunningen@bloomberg.net

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net


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