Obama calls for rebuilding of US economy

07-07-2012, 02h29
WASHINGTON (AFP)

US President Barack Obama said Saturday the United States needed to do more than just reclaim jobs lost to the recession, as he called for rebuilding the economy to make it secure for future generations.

"Our mission isn't just to put people back to work - it's to rebuild an economy where that work pays; an economy in which everyone who works hard has the chance to get ahead," Obama said in his radio and Internet address.

The comment came after new Labor Department statistics showed that the June jobless rate was unchanged from May at 8.2 percent, with 12.7 million people in the ranks of the unemployed.

The United States added only 80,000 jobs in June, the third month of weak jobs growth amid a sluggish economy that has kept hiring on hold, the department data made public on Friday showed.

The figure was far below what is needed just to keep pace with growth in the labor force, signaling no relief in sight for an unemployment rate that has held above 8.0 percent for more than three years.

The disappointing report toughened the challenge ahead for Obama, who is fighting to keep his job in the November presidential election against charges by Republican challenger Mitt Romney that his administration has failed to revive the economy.

Romney argued that Friday's weak US jobs report was proof Obama's economic policies were failing, saying "this kick in the gut has got to end."

On Friday, Obama signed a bill funding scores of transportation projects across the country as well as a bill keeping interests on student loans from increasing. Both passed Congress last week

"Those steps will make a real difference in the lives of millions of Americans," the president said in the radio address. "But make no mistake: we've got more to do."

Economists were divided over whether the slump in the employment market was bad enough to push the Federal Reserve into additional stimulus for the economy at its July 31-August 1 policy board meeting.

"We do not believe today's report is sufficient to shift the Fed into action at the next FOMC meeting," Barclays analyst Michael Gapen said.

Gapen noted that the Federal Open Market Committee had extended its bond-swap program to year-end at its June meeting, when the central bank slashed a half percentage point from its 2012 economic growth forecast to a tepid 2.4 percent rate at best.

Nomura economists highlighted the risk that instead of a temporary soft patch this could be the beginning of a longer-lasting downshift in economic activity.

"A persistent deterioration in labor market conditions would likely spur the Federal Reserve to adopt an even more accommodative stance," they said.

The data showed a sharp slowdown in hiring across most major industries during the second quarter as the economy struggled to gain traction against pressures from Europe's debt crisis.

The average number of jobs added in April, May and June was 75,000 jobs, only a third of the first quarter's pace.


AFP