By Frank Quaratiello and Ira Kantor | The Boston Herald | September 8, 2012
The weak August jobs report will likely force the Federal Reserve to launch a third round of “quantitative easing,” basically creating new money to prop up the economy, even if the central bank doesn’t explicitly tip its hand at next week’s meeting.
The country’s unemployment rate dropped to 8.1 percent, but only 96,000 new jobs were added last month, 45,000 fewer than in July. The jobless rate declined mainly because 368,000 Americans gave up looking for work.
“If last night was the party, this morning is the hangover. For every net new job created, nearly four Americans gave up looking for work entirely,” GOP presidential nominee Mitt Romney said, contrasting the jobs report to this week’s festive Democratic National Convention.
Economists said the lackluster numbers will make November’s election a tighter race, even after positive news from Europe sent the financial markets soaring Thursday.
“If there isn’t robust job growth next month, that would not be good for (Obama). If it’s 140,000, 150,000 next month, he can make the argument we’re moving in the right direction,” said Elliot Winer, chief economist at Northeast Economic Analysis Group. “But Romney can still make the argument it’s poor job growth, he can do more.”
While Democrats tout 4.5 million private-sector jobs created over the last four years, David Tuerck, executive director of Suffolk University’s Beacon Hill Institute, said yesterday there are actually 4.68 million fewer overall jobs in the U.S. economy since President Obama took office.
Northeastern University economist Alan Clayton-Matthews said: “The jobs report is helpful to the Romney campaign. It’s also consistent with the view that was being put out at the DNC last night that it’s taking a while. It is growth, but it’s slower than what was hoped for and the question is: Is it too slow for the patience of American voters?”