Romney attacks Obama over slim rise in jobless rate

Republican presidential contender Mitt Romney said on Friday that the rise in the US unemployment rate shows the economy is at a virtual standstill. 

Romney used Friday's jobs report, which showed the jobless rate edging a tenth of a point higher to 7.9 percent, as a chance to land some final blows on his rival, President Barack Obama, ahead of next Tuesday's presidential election.

Romney, who has made the nation’s feeble jobs market the centerpiece of his campaign and argued that his success as a businessman means that he is better equipped than President Barack Obama to fix the sputtering economy, blamed the figures on the incumbent president.

“The jobless rate is higher than it was when President Obama took office, and there are still 23 million Americans struggling for work,” Romney added. "On Tuesday, America will make a choice between stagnation and prosperity.”

The rise in the jobless rate is believed to be down to a jump in the number of people registering as job hunters. Only people who have recently looked for a job can count as unemployed.

But in what was better news for Obama, the Labor Department also announced on Friday that employers had added 171,000 people to their payrolls last month.

While the rise in the jobless rate was expected, the increase in payrolls beat even the most optimistic forecast in a Reuters poll and gave the White House fuel to launch a strenuous defence of Obama’s time in office.

“Today’s employment report provides further evidence that the US economy is continuing to heal from the wounds inflicted by the worst downturn since the Great Depression,” Alan Krueger, chairman of the White House Council of Economic Advisers, said in a statement.

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The latest Reuters/Ipsos daily tracking poll showed Obama and Romney in a dead heat. Still, the political impact of the report will likely be muted as most voters perceptions on the economy are likely firmly fixed by now.

Recession looms

Even with a moderate pace of job creation, the U.S. economy faces a real threat of a renewed recession next year.

Without action by lawmakers, existing legislation will raise taxes and cut spending to the tune of about $600 billion in 2013. That scenario—known in Washington as the “fiscal cliff” -- could easily cause the economy to contract.

Europe’s debt crisis, which has hit factories around the world, including those in the United States, is also weighing on the U.S. economic recovery.

In October, however, US manufacturing added 13,000 jobs, snapping two straight months of decline.

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Nonetheless, the Fed is expected to expand a new bond-buying program at the end of the year to compensate for the end of another stimulus program aimed at driving down borrowing costs.

Persistently weak labor market conditions led the central bank in September to launch a program to buy $40 billion worth of mortgage-backed securities every month until there is a sustained pick-up in the labor market.

“The Fed is probably not impressed with the improvement in the job market over the past couple of months,” said Ryan Sweet, an economist at Moody’s Analytics in West Chester, Pennsylvania.

(FRANCE 24 with wires)