Economic news stirs campaigns

The Labor Department numbers released Friday show that the economy has been losing jobs at a fairly rapid pace since the beginning of the year. Revised figures show that the economy has lost 605,000 more jobs than it has created -- an average of 76,000 a month. The economy needs to create about 100,000 jobs a month to keep pace with population growth.

The last time the unemployment rate was above 6% was in the fall of 2003, as the economy was recovering from recession.

In addition to flagging global demand, economists blamed the collapsing housing sector for spreading its contagion to the rest of the economy. Foreclosures have reached an all-time high in the U.S., a trade group reported Friday, with 2.75% of all mortgages in default last quarter, up from 2.47% in the first quarter. That's nearly double the rate of last year.

"The combination of rising prices, the housing debacle and the worsening credit crunch is cascading through the economy, hurting employment," said Sung Won Sohn, an economist at Cal State Channel Islands in Camarillo.

Sohn pointed to the "lackluster" back-to-school sales reported Thursday as "another telltale sign of weakening consumer spending." He noted that "prices have been rising faster than income, eroding buying power."

The unemployment report was significantly worse than most economists had expected, and stocks initially sank on the news before recovering. The Dow Jones industrial average, which fell nearly 350 points Thursday, ended Friday with a gain of 32 points to 11,220.96.

Lichtman, the historian from American University, said that so far McCain had somewhat succeeded in presenting himself as a "maverick," casting blame for the nation's economic woes on "Washington," not on the current administration.

"I've reached out my hand to those on the other side of the aisle to work for a common good," McCain said Friday in Wisconsin. "Sen. Obama never has, and that's why this ticket is the ticket to shake up Washington and get things done for you -- for our people."

Lichtman said McCain was trying hard but history suggested that he would be unable to entirely separate himself from the legacy of the current Republican administration.

"I'll bet you the average person could not tell you one single way John McCain's approach to the economy differs from George W. Bush's," Lichtman said. "History shows that when you are the nominee of the party holding the White House, you can't run away no matter how hard you try from the president of your own party."

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maura.reynolds@latimes.com

Times staff writers Tiffany Hsu in Los Angeles, Noam Levey in Duryea, Pa., Marc Lifsher in Sacramento, Peter Gosselin in Washington and Maeve Reston in Cedarburg, Wis., contributed to this report.