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THE RACE TO THE WHITE HOUSE

Continued Job Troubles Seen in Crucial States

August 21, 2004|Maura Reynolds | Times Staff Writer

WASHINGTON — In a piece of unwelcome news for President Bush's reelection bid, the government reported Friday that although the economy was creating jobs in much of the country, several swing states critical to the election were still losing jobs or barely holding their own.

The country as a whole gained 32,000 jobs in July, according to the Bureau of Labor Statistics. But 22 states -- many of them political battlegrounds -- lost jobs.

The states hit the hardest in July were Michigan and Missouri, where Bush and his Democratic challenger, Sen. John F. Kerry of Massachusetts, have been campaigning avidly. Missouri lost 51,800 jobs, a drop of about 2%. Michigan lost 24,500 jobs, or about half a percent.

For the year, Missouri showed zero job growth, and Michigan was down 0.6%.

Ohio, the battleground state most at the center of the debate over the economy, showed little change. Jobs were up by 3,400 for July, but still down 4,200 since January.

Incumbents benefit from a strong economy, but political analysts contend there is a lag in voter perceptions of economic well-being. Incumbents need the economy to be humming several months before the election.

"We're getting to the point where it's not going to get any better for the president," said Bill Ballenger, editor of the Inside Michigan Politics newsletter. "Everyone has pretty much believed all along that we needed to see signs of a permanent, robust recovery by May or June or certainly no later than July. And we're not getting it."

The Bush campaign tends to focus on positive national trends. Campaign spokesman Scott Stanzel said Friday that the president's policies had brought the nation out of recession.

But national economic results are less important to the final outcome of presidential elections than many people think, said Mark Zandi, chief economist at Economy.com, a consulting firm.

"What matters is what is going on in those key states," Zandi said. "Ohio and Michigan are the weakest economies in the nation, and they are unlikely to improve significantly before election day."

As for Missouri, he said, "it's a struggling economy as well.... The election may well boil down to Missouri or Ohio." 7i9

Analysts in swing states said that unforeseeable events in the next two months before the election -- in Iraq, for example -- could be decisive. But barring the unexpected, the economy is likely to be the dominant issue in the few states that count most.

"Clearly the Democrats will try to spin the numbers one way and the Republicans will spin them the other way. In Ohio, the Republicans will have a harder time spinning those numbers," said Herb Asher, a political scientist at Ohio State University. "One thing that's clear is that we will have fewer jobs in Ohio on election day than we did four years ago."

Recent polls suggest Bush is losing ground in Michigan despite visiting the state six times in the last five weeks and planning another trip Aug. 28, Ballenger said.

"It's too early to throw in the towel here in Michigan, but some people are saying that Michigan may be taken off the battleground state list in the next five to six weeks," he said.

Apart from those Midwestern states, the jobs report was largely positive. The unemployment rate dropped by one-tenth of a percentage point to 4.9% in the South, 5.3% in the Northeast and 5.7% in the West. It rose by two-tenths of a point to 5.5% in the Midwest.

Analysts say voters care more about the direction than the amount of joblessness. Most of the states that showed the strongest growth were firmly in the grip of one candidate or the other.

Among other battleground states, the jobs report showed strong growth in Oregon, up 600 jobs in July and 37,200 since January, an increase of 2.4%. But recent polls suggest Kerry has taken a strong lead in the state, so the improvement may not have much impact.

In California, widely considered a safe state for Kerry, 17,300 jobs were lost in July. Since January, the news is better: a net gain of 69,900 jobs, or 0.5%.

The best news for Bush may well have been in Wisconsin, another state he has visited multiple times in recent weeks. The report showed 7,000 new jobs in July and 49,600 for the year.

Kenneth R. Mayer, a political analyst at the University of Wisconsin, said that in a race as close as this one was expected to be, that news might make the difference.

"Strong economic numbers benefit the president," he said. "Right now, that state shows a tie [in the polls]. If you flip just 1,000 or 5,000 voters, that could easily be the margin of victory."

In Missouri, the effect of the economy on the election is increasingly hard to figure, said Dave Robertson, a political scientist at the University of Missouri in St. Louis. On one hand, the sharp job loss increases anxiety among voters tied to the auto industry and other manufacturing sectors. On the other, Missouri has a lot of defense industries and responds well to tough talk from the president about national security.

The deciding factor in Missouri, Robertson suggested, may be whether gasoline prices also erode voter confidence.

While the job numbers seemed to be good news for Kerry's candidacy, he was cautious about using them. Campaigning Friday in Charlotte, N.C., he focused instead on the pain of the unemployed.

"I think every American deserves to have leadership that understands the difficulties of average folks every day, trying to buy their healthcare, pay the mortgage, be able to do better," Kerry said.

Kerry campaign spokesman Phil Singer said: "These numbers are not good news for anybody. We want to see positive job numbers every month. That's the reason John Kerry is running for president. Right now there are a million fewer jobs than there were when George Bush became president."

Times staff writer Matea Gold contributed to this report from Charlotte, N.C.

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