United States President George W Bush’s re-election prospects received a severe setback last week when government figures from Washington showed the United States economy was producing far fewer jobs than Wall Street had been expecting.
The 32 000 July increase in non-farm payrolls — described as ”shockingly low” by one financial analyst —was almost 200 000 down on market predictions and led to a sharp sell-off in shares and the dollar.
With jobs one of the main issues in the race for the White House, analysts said the economy would have to put in an improbably strong performance between now and early November to spare Bush the charge of having presided over a loss of jobs during his tenure.
”It implies a very sharp revision to the overall outlook for the economy,” said Scott Brown, the chief economist at Raymond James in St Petersburg, Florida.
Democratic candidate for the White House John Kerry has been campaigning hard on the issue of the loss of more than a million jobs during Bush’s stewardship — particularly in the swing states of the Midwest, where the labour market has been the weakest.
Bush’s Treasury Secretary John Snow reflected the administration’s disappointment that the gain in jobs last month had failed to match Wall Street’s 228 000 forecast. He said that he still expected the economy’s underlying strength to keep expansion intact during the second half of 2004.
Financial markets, already rat- tled by rising oil prices, responded negatively to the news about jobs. — Â