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Blow for Obama and blame for Europe as US jobless rise

The jobless rate rose to 8.2%, or 12.7 million people, after just 69,000 new jobs were created in May — less than half than expected and not enough to keep up with population growth.

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President Barack Obama's re-election prospects were dealt a sharp blow on Friday by dire jobs figures that showed America's unemployment rate rising again for the first time in almost a year.

The jobless rate rose to 8.2%, or 12.7 million people, after just 69,000 new jobs were created in May — less than half than expected and not enough to keep up with population growth. The length of Americans' average working week also fell.

The figures brought a steady improvement since last June to an abrupt halt, and chilled White House hopes of going below the psychologically important eight% barrier before the election campaign intensifies at the end of summer.

Addressing a rally in Minnesota last night, Obama tried to shift blame to the eurozone crisis. "We can't fully control everything that happens in other parts of the world," he said. He promised: "We will come back stronger, we do have better days ahead."

The president urged Congress, which is half-controlled by the Republicans, to pass proposals he made in a jobs bill last year to "help states prevent more lay-offs" among key public sector workers.

No US president since Franklin D Roosevelt in 1940 has been re-elected while presiding over a jobless rate higher than 7.2%, a fact encouraging Republican hopes of ousting Obama in November.

Mitt Romney, his Republican opponent, described the new figures as "devastating news for American workers and American families". He said even though "jobs are the number one job for the presidency", Obama had prioritised passing his overhaul of the US health care system, which Romney said was "scaring" companies away from hiring.

"It is now clear to everyone that President Obama's policies have failed to achieve their goals and that the Obama economy is crushing America's middle class," said Romney.

Even more troubling data lurked under the headline figure. April's rise in jobs, which was originally estimated to be 1,15,000, was revised down sharply to 77,000. Meanwhile, the number of people who had been unemployed for six months or more rose from 5.1 million to 5.4 million. So many people have given up looking for work that if the participation rate in the labour force were the same now as when Obama came to office, unemployment would stand at 10.9%.

The White House blamed George W Bush's administration. Alan Krueger, the chairman of Obama's Council of Economic Advisers, said the jobs crisis was "long in the making", adding: "We are fighting back from the worst economic crisis since the Great Depression."

Economists had expected a 1,50,000 increase in jobs, which would have held the jobless rate at 8.1%. More than 90,000 new jobs are required per month to keep up with population growth.

Analysts said the dismal figures probably represented a sharp correction to unexpectedly strong job growth early in the year. This was attributed to an unseasonably warm winter, which tends to encourage people to spend more, and employers to hire more, earlier than expected.

The data capped a miserable week for Obama, who is struggling to present a clear line of attack against Romney. The Republican's popularity has been growing steadily since the end of his party primary, which he officially won this week. An attempt by the Obama campaign to focus on Romney's record as governor of Massachusetts from 2000 to 2004 sank without much trace.

This followed a week of contradictory messages on Romney's record at Bain Capital, a private equity firm. Former president Bill Clinton, one of Obama's most important campaign allies, compounded this by telling a CNN interview that Romney had a "sterling business career" and crossed the "qualification threshold" to be president.

The official line from Obama's campaign is that Romney was a predatory capitalist who bankrupted companies to boost his $250 million (£160 million) fortune. Obama has said a career at Bain does not provide useful experience for being US president.

Campaigning yesterday in Wisconsin, a key swing state, Clinton said: "The great thing about not being president is that you can say whatever you want."

Obama remains 2.3 points ahead of Romney in an aggregate of national polls, according to RealClearPolitics.

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