WASHINGTON – The U.S. economy last month unexpectedly produced the biggest burst of new jobs since last spring, raising hopes of stronger hiring ahead and giving a boost to President Barack Obama as he embarked on a 10-day trip to Asia that will focus on creating new opportunities for American workers.
But Friday’s jobs report laid bare the underlying challenge the president faces as he tries to rev up the economy as well as his own political fortunes after Tuesday’s Republican landslide in the midterm congressional elections: Obama remains committed to the idea that the key to prosperity for Americans is greater participation in the global economy, but he has yet to convince millions of Americans that his strategy will return them to financial security.
“You look at the (American) public anxiety about globalization and outsourcing and jobs – they’re all connected,” said Thea Lee, policy director at the AFL-CIO in Washington. “That’s what we heard over and over when we knocked on thousands of doors during the political season.”
Despite the addition of 151,000 new jobs in October, the nation’s unemployment rate remained stuck at 9.6 percent for the third month in a row. The economy needs to create about 7.5 million jobs to reach the pre-recession level – and it will most likely have to do so with fiscal stimulus dollars running out and policy options sharply reduced after the Republican inroads in the midterm elections.
More than a year after the end of the recession, the number of jobless workers in October remained at nearly 15 million, with more than 6 million unemployed for more than six months.
At the same time, Friday’s jobs report capped a week of generally positive economic news that suggested the recovery may be regaining some of the momentum lost in the spring.
The decline of the construction industry showed signs of bottoming, manufacturing continued to expand, and auto sales were stronger than expected. Meantime, the Federal Reserve’s announcement Wednesday that it plans to buy an additional $600 billion in Treasury bonds to stimulate spending and investment also has added to hopes of a stronger recovery.
Obama said Friday before departing for India, the first stop on the Asia swing, that the latest employment report was heartening. He noted that the private sector has added jobs for 10 straight months, including more than 100,000 in each of the last four months, while acknowledging that the jobless rate remained “unacceptably high.”
Now, with little chance of getting a newly Republican-controlled House to support major new spending programs – and the Fed having fired what may be its last shot to stimulate the economy – Obama is turning to overseas markets in the hopes of creating more jobs through exports.
“It’s also absolutely clear that one of the keys to creating jobs is to open markets to American goods made by American workers,” Obama said Friday. “Our prosperity depends not just on consuming things, but also on being the maker of things.”
Manufacturing has been a key driver of the U.S. economic recovery this year. But after adding 170,000 jobs in the first seven months, manufacturers have cut 36,000 in the last three, including 7,000 positions in October.
Most of the 151,000 jobs created last month, as in recent months, have come from temporary-help firms, health and education services and restaurants – mostly service positions that don’t pay as well.