President Obama, armed with welcome -- and somewhat surprising -- evidence of an economic recovery to brandish against his critics, declared this afternoon that "the worst may be behind us."
"Today we're pointed in the right direction," he said in the White House's Rose Garden, asserting that job losses are at half the rate when he took office in the worst recession since the Great Depression.
He also noted that a week ago, the gross domestic product dropped just 1 percent in the second quarter.
The president repeated his defense/explanation of the $787 billion economic stimulus package, saying that it has helped rescue our economy from "catastrophe" and started to lay the groundwork for sustained growth.
But Obama said he won't be satisfied until many more Americans can find good jobs.
"It won't be easy," he said, since change comes with difficulty in Washington. "We have a steep mountain to climb and we started in a very deep valley," he added. (His full remarks are below.)
Obama, Vice President Joe Biden, and Cabinet secretaries had been talking up the economic stimulus package this week -- in part to inoculate the White House from unemployment numbers out this morning that many economists predicted would top 10 percent nationally.
Instead, the jobless rate declined slightly to 9.4 percent in July from the 26-year high of 9.5 percent in June -- the first decrease since April 2008. The Labor Department reported that employers cut 247,000 jobs, the fewest in a year.
Still, there were 14.5 million Americans out of work in July, and if those who have given up looking for a job or who have been forced to take part-time work are counted, the rate was 16.3 percent in July.
As the unemployment rate steadily and stubbornly rose month after month, Obama's job approval ratings and Americans' confidence in his handling of the economy dropped. The opposite can be expected to happen if the jobless numbers keep dropping.
Representative George Miller of California and Senator Edward M. Kennedy of Massachusetts, the Democrats who lead the House and Senate Labor Committees, respectively, issued a joint statement:
“When President Obama inherited this economic crisis seven months ago, our nation was shedding 700,000 jobs a month. Today's decline in unemployment – the lowest number of jobs we’ve lost in the last year – is very good news for working families. It shows that President Obama's economic recovery program is working – saving jobs in classrooms, police stations, and firehouses and creating new jobs for Americans in construction and renewable energy fields. While our nation’s road to recovery will take time and patience, there is no doubt that we are moving in the right direction.
“Even in the midst of this promising news, it’s clear we still have a long way to go. More than 5 million Americans have been looking for work for more than six months, without success. We must do more to help these working families keep food on their tables and hope in their hearts. An extension of unemployment benefits should be at the top of Congress’s agenda when we return in the fall.”
AFL-CIO president John Sweeney also attributed some of the unemploymen turnaround to the stimulus package.
"The dip in the unemployment rate in July is a welcome sign that President Obama’s economic recovery package is starting to blunt the impact of the most severe recession in a generation. By refusing to listen to the naysayers, the President and Congress have helped to avert a total financial meltdown -- despite much continuing pain. We still have a long way to go until our economy is growing and creating good jobs at a healthy rate -- and we will need decisive and timely action from our government in the meantime," Sweeney said in a statement.
"It is not good news that we lost 247,000 jobs in July, bringing total job loss since the recession began to 6.7 million. The growth of long-term unemployment by another 584,000 is especially disturbing and cries out for immediate, additional attention. There are now more than 5.7 job seekers for every available job -- up from 1.7 at the start of the recession. The July job figures would have been much worse without the stimulus, which has helped to slow the pace of job loss to less than half of what it was just six months ago. From May to July, job losses averaged 331,000 per month, compared with losses averaging 645,000 per month from November to April."
UPDATE: But Republicans didn't see much encouragement in the jobs report, and continued their criticism of Obama and Democrats for their economic policies.
"While President Obama was taking a victory lap to celebrate the economy's performance, more Americans lost their jobs and the budget deficit soared to a record $1.3 trillion in July," Republican National Committee chairman Michael Steele said in a statement. "In the month of July alone 247,000 Americans lost their jobs, which means more than 2.8 million Americans have lost their jobs since the president took office. The president said his stimulus bill would keep unemployment from rising higher than 8 percent. It hasn't. Now he expects Americans to believe his trillion-dollar health care experiment will improve their health care? It won't. America simply can't afford more of the president's costly experiments."
Representative John Boehner, the top-ranking House Republican, chimed in: "Today's unemployment report is yet another reminder that more spending, taxing, and borrowing does not mean more jobs for the American people. Instead of rewriting history on their 'stimulus' promises, Washington Democrats should abandon their job-killing agenda," said Boehner in a release. "Rather than pushing an increasingly unpopular government takeover of health care that will increase costs, drive up the deficit, raise taxes, and destroy jobs, Democratic leaders would be well-served to work with Republicans on real reforms that expand Americans' access to affordable health care and help small businesses create more jobs."
THE PRESIDENT: Good afternoon, everybody. I'd like to say a few words about the state of our economy, and what we're doing to put Americans back to work and build a new foundation for growth.
Last week, we received a report on America's Gross Domestic Product -- a key measure of our economic's [sic] health -- and it showed marked improvement over the last few months. This morning, we received additional signs that the worst may be behind us. Though we lost 247,000 jobs in July, that was nearly 200,000 fewer jobs lost than in June, and far fewer than the nearly 700,000 jobs a month that we were losing at the beginning of the year.
Today we're pointed in the right direction. We're losing jobs at less than half the rate we were when I took office. We've pulled the financial system back from the brink, and a rising market is restoring value to those 401(k)s that are the foundation of a secure retirement. We've enabled families to reduce the payments on their mortgages, making their homes more affordable and reducing the number of foreclosures. We helped revive the credit markets and opened up loans for families and small businesses.
While we've rescued our economy from catastrophe, we've also begun to build a new foundation for growth. That's why we passed an unprecedented Recovery Act less than a month after I took office -- and did so without any of the earmarks or pork-barrel spending that's so common in Washington. Now, there's a lot of misinformation about the Recovery Act. So let me repeat what it is and what it is not. The plan is divided into three parts.
One-third of the money is for tax relief that's going directly to families and small businesses. For Americans struggling to pay rising bills with shrinking wages, we've kept a campaign promise to put a middle class tax cut in the pocket of 95 percent of working families -- a tax cut that began showing up in paychecks about four months ago. We also cut taxes for small businesses on the investments they make, and substantially increased loans through the Small Business Administration.
Another third of the money in the Recovery Act is for emergency relief that is helping folks who have borne the brunt of this recession. For Americans who were laid off, we expanded unemployment benefits -- a measure that's already made a difference in the lives of 12 million Americans. We're making health insurance 65 percent cheaper for families that rely on COBRA while they're looking for work. And for states facing historic budget shortfalls, we provided assistance that saved the jobs of tens of thousands of teachers and police officers and other public service workers.
So these two thirds of the Recovery Act have helped people weather the worst phase of this recession, while saving jobs and stabilizing our economy. The last third is dedicated to the vital investments that are putting people back to work today to create a stronger economy tomorrow. Part of that is the largest new investment of infrastructure in America since Eisenhower built the Interstate Highway System back in the 1950s. These are jobs rebuilding America: upgrading roads and bridges, and renovating schools and hospitals.
Now as we begin to put an end to this recession, we have to consider what comes next -- because we can't afford to return to an economy based on inflated profits and maxed out credit cards; an economy where we depend on dirty and outdated sources of energy; an economy where we're burdened by soaring health care costs that serve only the special interests. This won't create sustainable growth, it won't shrink our deficit, and it won't create jobs.
And that's why we've put an end to the status quo that got us into this crisis. We cannot turn back to the failed policies of the past, nor can we stand still. Now is the time to build a new foundation for a stronger, more productive economy that creates the jobs of the future.
And this foundation has to be supported by several pillars to our economy. We need a historic commitment to education, so that America is the most highly-educated, well-trained workforce in the world. We need health insurance reform that brings down costs, provides more security for folks who have insurance, and affordable options for those who don't. And we need to provide incentives that will create new, clean energy sources for our industries. That's where the jobs of the future are, that is the competition that will shape the 21st century, and that's a race that America must win.
So we have a lot further to go. As far as I'm concerned, we will not have a true recovery as long as we're losing jobs, and we won't rest until every American that is looking for work can find a job. I have no doubt that we can make these changes. It won't be easy, though. Change is hard -- especially in Washington. We have a steep mountain to climb, and we started in a very deep valley. But I have faith in the American people -- in their capacity for hard work and innovation, in their commitment to one another, and their courage to face adversity.
We've seen already that strength of character over the course of this recession. Across the country, people have persevered even as bills have piled up and work has been hard to come by. Everywhere I go, I meet Americans who've kept their confidence in their country and in our future. That's how we've pulled the economy back from the brink. That's why we're turning this economy around. I am convinced that we can see a light at the end of tunnel, but now we're going to have to move forward with confidence and conviction to reach the promise of a new day.
Thank you very much.
About Political Intelligence
Glen Johnson is Politics Editor at boston.com and lead blogger for "Political Intelligence." He moved to Massachusetts in the fourth grade, and has covered local, state, and national politics for over 25 years. E-mail him at firstname.lastname@example.org. Follow him on Twitter @globeglen.