Nervousness ahead of US jobs report

Andrew Beatty
Job seekers wait to meet with recruiters during a job fair in Brooklyn, New York, in April
Job seekers wait to meet with recruiters during a job fair in Brooklyn, New York, in April 2012. Trepidation foreshadows the release of key US jobs figures on Friday, a report that will mold perceptions about the path of the economy and the race for the White House

Trepidation foreshadows the release of key US jobs figures on Friday, a report that will mold perceptions about the path of the economy and the race for the White House.

The Labor Department will publish jobs data for April, which economists expect to show unemployment stuck at 8.2 percent, with the economy creating a modest 162,000 jobs during the month.

Like last week's tepid 2.2 percent economic growth figure for the first quarter, the jobs print will shape popular sentiment about the health of the economy as the presidential race gets underway.

Rising unemployment would engender fears that the US economy is headed for another stumble and would prove a major headache for President Barack Obama as he looks toward the November vote.

"Payrolls will assume an even greater significance on this occasion, given ongoing uncertainty over whether the US economy is set to suffer another summer slowdown as it did in both 2010 and in 2011," said Chris Walker of UBS.

Confidence has become a shaky plank of the US recovery from the 2008-09 recession, hit by earthquakes, fiscal crises, revolutions and infuriatingly mixed data.

Some 12.7 million workers remain unemployed across the country, according to the last jobs report. Unemployment dropped 0.1 point in March, but was marked by weakness in the retail sector and poor job creation figures.

Since then, new claims for unemployment benefits -- an indicator of the pace of layoffs -- have ticked upward.

"The notion that the economy is losing steam has gathered an increasing number of supporters in recent weeks," said Stephen Stanley of Pierpont Securities.

Jitters have also been heightened by the Federal Reserve indicating no more stimulus is likely if the current slow-but-sustainable recovery continues.

"Starting in 2012, the US economy may have to fend for itself," said Nigel Gault, an economist with IHS Global Insight.

Friday's figures will also have political ramifications.

They are published on the eve of the official launch of Obama's electoral campaign, against presumed Republican challenger Mitt Romney.

On Saturday Obama will visit Ohio and Virginia to begin to make his case for re-election.

Half of all voters say the economy is the single biggest issue in this November's election.

Since Obama took office in January 2009, the unemployment rate has arched from 7.8 percent at inauguration to 10 percent as the impact of the financial crisis spread, and back down to 8.2 percent today.

Obama's fate will turn on whether he can convince voters that his policies avoided another Great Depression and that his rival would return to the type of policies that failed in the past.

On Tuesday Obama's campaign challenged Romney's past role as the head of Bain Capital -- a venture capital firm -- accusing him of moving jobs overseas.

"As a corporate CEO he shipped jobs to places like Mexico and China," a campaign advertisement claimed.

At the same time the Romney team has led a steady drumbeat of economic barbs against Obama.

Last month Romney pounced on weaker than expected jobs data.

"It is increasingly clear the Obama economy is not working and that after three years in office the president's excuses have run out," he said, hitting the theme underpinning his bid to evict Obama after a single term.

The Labor Department figures for March showed the economy only pumped out 120,000 jobs, though the unemployment rate did dip from 8.3 percent to 8.2 percent -- a three-year low.