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Disappointing Jobs Data Intensify Fight Over Obama Agenda

By Henry J. Pulizzi and Darrell A. Hughes

Of DOW JONES NEWSWIRES

WASHINGTON -(Dow Jones)- Republicans seized on downbeat economic news to say the $787 billion economic stimulus plan isn't working as advertised and take swipes at President Barack Obama's broader agenda, while the White House vowed to do "whatever it takes" to revive the still-struggling economy.

The unemployment rate rose to 9.5% last month, as non-farm payrolls sank by 467,000, disappointing numbers that raise questions about when the long-awaited economic recovery will finally begin. Since the recession started at the end of 2007, the economy has lost 6.5 million jobs. The jobless rate - already at its highest level in a quarter century - is expected to eclipse 10% before the end of the year.

The Republican National Committee said those figures are evidence the stimulus plan, which the administration says will save or create 3.5 million jobs over two years, isn't doing its job.

Christina Romer, who heads Obama's Council of Economic Advisers, said the White House wished Thursday's data were better, but urged people to keep the figures in perspective. The 467,000 jobs lost last month reflect an improvement from the massive monthly losses earlier this year, she said in an interview on CNBC.

She pointed to private-sector forecasts that suggest economic growth will return toward the end of the year, but conceded that employment, a lagging indicator, will take longer to improve.

Asked if the administration is considering a second stimulus package to jolt the economy back to life, Romer said, "We'll do whatever it takes."

"I think we'll be monitoring this and looking at everything," she said.

While the White House's top economist declined to rule out a second stimulus, Republicans pounded the effectiveness of the first package.

"June's unemployment report shows a job loss of 467,000 and proves that the stimulus package is not a 'Recovery Act,'" said RNC Chairman Michael Steele.

House Republican Whip Eric Cantor, R-Va., accused the White House of shunning GOP lawmakers and taking a "go it alone" approach that hasn't created jobs. He said Obama's health care and energy plans will worsen the situation.

"Inexplicably, instead of focusing on jobs and restoring the financial security that has been lost by millions of struggling families, the President continues to push an agenda that the majority of Americans are uneasy with," Cantor said in a statement.

House Republican Leader John Boehner, R-Ohio, criticized congressional Democrats for "spending, taxing, and borrowing with reckless abandon" without producing results. "That's the same failed formula that has cost Americans their jobs in the past, and it's costing them their jobs once again," he said.

Labor Secretary Hilda Solis counseled patience as recovery programs continue to be implemented. Results could take time to appear, she cautioned. "We've only been at this 130 days," Solis said. She said manufacturing-based jobs in the construction arena will see a rebound as more infrastructure funds are becoming available and reaching businesses.

Martin Regalia, chief economist at the U.S. Chamber of Commerce, said the stimulus is providing some cushion to the economy, which expects to start growing sometime in the third quarter.

"We're now coming into the time period where the fiscal stimulus will have its biggest impact," Regalia said. "It's had some salutary benefits so far and we'll have even more over the next year."

-By Henry J. Pulizzi and Darrell A. Hughes, Dow Jones Newswires; 202-862-9256; henry.pulizzi@dowjones.com

  (END) Dow Jones Newswires
  07-02-091150ET
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