144,000 jobs added in Aug., report shows

Figures indicate economy is improving, Bush says

Growth is weak, Kerry responds

Unemployment rate dips slightly to 5.4 percent

September 04, 2004|By Jamie Smith Hopkins | Jamie Smith Hopkins,SUN STAFF

The U.S. job market regained some momentum last month as employers added 144,000 positions, taking the sting out of a recent litany of poor economic numbers just as the presidential campaign enters its final stretch.

The highly anticipated Labor Department report, released yesterday, wasn't a home run for President Bush because economists consider the growth average at best. But it does offer the possibility that things are again on the upswing after a surprisingly weak few months, and Bush played up that perspective in a morning stump speech.

"It shows that our economy is strong and getting stronger," he said to supporters in Pennsylvania.

The unemployment rate dropped to 5.4 percent, down from 5.5 percent, though that was largely the result of Americans leaving the labor force.

"There will be something in it for both sides," said Edward Montgomery, the University of Maryland's dean of behavioral and social sciences and an economist with the National Bureau of Economic Research. "The Bush administration will tout that it's a pickup from the last couple of months, and it's a positive number. I think the Kerry campaign will say this is a continuation of the same kind of weak growth that we've gotten through his whole administration."

That's what Democratic challenger John Kerry did yesterday morning, noting that Bush "is now certain" to be the first president since the Great Depression to face the voters with fewer jobs than there were at the start of his term.

Economic expansion or lack thereof normally plays an enormous role in presidential elections. Bush's father knows that well, having been beaten in 1992 by a man with the slogan, "It's the economy, stupid."

But in this political season the issue has made way for war: the one in Iraq, the one against terrorism and the one in Vietnam a generation ago.

Those issues were the topic of choice in speeches at the Republican National Convention. The location - New York City, site of the worst Sept. 11 terrorist attacks - was symbolic.

That has frustrated Democrats because polls show Kerry has an edge on economic issues, while the focus on military action plays to Bush's strengths as a wartime leader.

Voters' opinion about the health of the economy is sharply partisan: Seven of 10 of the Republicans surveyed by American Research Group approve of Bush's handling of the economy, while about the same number of Democrats disapprove.

But the disagreement is not just partisan.

Even experts agree that the employment numbers appear to tell different tales. America has 910,000 fewer jobs now than when Bush took office, a fact that protesters tried to spotlight outside the convention this week by gathering in an "unemployment line" three miles long.

But the unemployment rate, the lowest it has been since Oct- tober 2001, is the same as when President Bill Clinton was re-elected in 1996.

Public is split

"The public's kind of split in terms of where they think we are with the economy," said Michael Korzi, a Towson University political science professor.

After strong growth in the spring, recent economic indicators have been largely a chorus of bad news. Consumer confidence fell last month, the Conference Board reported Tuesday. Back-to-school shopping was weak for several major retailers. New claims for unemployment benefits rose for the second week in a row, the Labor Department said Thursday.

The 144,000 jobs produced last month was not quite at the level needed to keep up with population growth, nor what economists had forecast - about 150,000 in both cases. Montgomery called it "pretty mediocre."

Investors agreed, sending stocks lower yesterday. The Dow Jones industrial average fell 30.08 points to 10,260.20. The Nasdaq composite index dropped 28.95 points to 1,844.48, and the Standard & Poor's 500 index fell 4.68 points to 1,113.63. But last month is still an improvement over June and July.

The Labor Department originally estimated gains of 110,000 jobs in both months combined. Yesterday, it revised total job growth upward in those months to the tune of almost 60,000.

Mark Vitner, senior economist with Wachovia Corp., a Charlotte, N.C.-based financial company, sees reason to be optimistic. "It was a fairly decent gain," he said. "We're not back to peak performance, obviously, and we've got a ways to go, but we're moving in the right direction."

He said the consistent drop in unemployment - down from 6.3 percent the beginning of last summer - is significant because Americans pay attention to the jobless rate. Bush can use the new statistic to his advantage, Vitner said.

Speaking yesterday in Moosic, Pa., the president said that the unemployment rate is lower than the average for the 1970s, 1980s and 1990s. The country has created an extra 1.7 million jobs since August 2003, he added.

"Because we acted, we've overcome recession, scandal, stock market decline and a terrorist attack," Bush said.

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