Video: Economy not recovering quickly, smoothly

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    >>> week of grim numbers culminating with the news that hiring all but hit a brick wall last month. president obama had more to say about this today. john yang has the story tonight.

    >> reporter: in his weekly internet address today --

    >> all three american automakers are adding shifts and creating jobs at the strongest rate since the 1990s .

    >> reporter: president obama emphasized the positive, echoing the themes when he visited a toledo auto plant this week. the same day, 5,000 manufacturing jobs disappeared in may as the unemployment rate ticked up to 9.1%. earlier this week, another report showed home prices have plunged 33% from their june 20, '06 peak. it's the lowest they have been since the housing bubble burst.

    >> we dug ourselves in a deep hole . we're slowly getting out of that hole but it's going to be a long, long climb.

    >> reporter: for financially stressed americans , it may feel like they are still near rock bottom .

    >> i have bills to pay. the further i'm unemployed, the further behind i'm going to get.

    >> reporter: many struggle to make home mortgage payments.

    >> those were the most difficult things, talking to our children and letting them know there's a possibility that we may not be able to keep our home.

    >> reporter: more than 22 million americans can't find a fulltime job. and more than 6 million of them without a job of any kind for more than six months. but immediate help for them doesn't seem to be on policymakers agendas. in washington the big debate is over how the longer term direction of government is affecting businesses.

    >> the overtaxing, overregulating, and overspending that's going on here in washington is creating uncertainty and holding them back.

    >> reporter: analysts say congress and the federal reserve are both unlikely to pump any more stimulus money into the economy.

    >> i think there's a sense both in the stock market and in the broader public that they have done too much already.

    >> reporter: but for millions of americans out of work or just struggling to get by, it may feel like someone isn't doing enough. john yang , nbc

updated 6/4/2011 7:12:12 PM ET 2011-06-04T23:12:12

Editor's note: White House Correspondent Ben Feller has covered the Bush and Obama presidencies for The Associated Press.

President Barack Obama cannot escape one giant vulnerability as he bids to keep his job: There are millions of voters who still don't have one.

Major Market Indices

Suddenly, the snapshot of the American economy is depressing again.

Job creation is down. So is consumer confidence. And homes sales, auto sales, construction spending, manufacturing expansion.

The brutal month of May was a reminder of the economy's fragility and the risks for an incumbent president.

Story: Why jobs no longer top Washington's agenda

Nothing that Obama oversees, not even a success as dramatic as finding and killing Osama bin Laden, will matter as much as his handling of the economy. It is the dominant driver of voter behavior. People hold their president accountable if they can't find work in the richest country in the world.

The weakening recovery is testing the entire foundation of Obama's optimistic economic message, that the nation is getting stronger all the time. As much as the White House says it never dwells on any single jobs report, and Obama never even mentioned the troubling one released Friday, the stakes get higher by the month.

GOP message for 2012: 'Obama has failed'
A finally forming field of Republican presidential competitors is maneuvering into the space for the public's attention with this message: Obama has failed.

Election Day 2012 is 17 months away, and Obama's campaign knows incremental job growth won't do. The unemployment rate is 9.1 percent. If it stays anywhere near there, Obama will face re-election with a higher jobless rate than any other post-war president.

Story: 2012 Republican hopefuls court religious right

In his favor, Obama still has the loudest voice to sell his message that the longer term trends, including job growth every month, are good.

Nearly halfway through a year dominated by foreign events mostly outside his control, he plans to build his next few months around economic events.

So what comes next will be a summer when both sides select the economic facts that best suit their case. It will play against a backdrop of trying to cut a massive deficit while letting the nation borrow more so it doesn't default.

As Obama pushes his economic agenda, his re-election chances bank on more than job growth. They also depend on how well he can remind people that he inherited a recession and that compared with the early days of 2009, the country is in a better place.

Barack Obama
Paul Sancya  /  AP
President Barack Obama speaks at Chrysler Group's Toledo Assembly complex in front of a Jeep Wrangler on Friday in Toledo, Ohio.

"This economy took a big hit," Obama said Friday in Ohio, a pivotal 2012 state. "You know, it's just like if you had a bad illness, if you got hit by a truck, it's going to take a while for you to mend. And that's what's happened to our economy. It's taking a while to mend."

Is progress enough to convince people that he deserves a second term?

Weak May jobs report
If so, he can't afford many setbacks like the new jobs report. Employers in May added just 54,000 jobs, the fewest in eight months. Almost 14 million people are jobless. Analysts suggested the economy could improve this year, but the recovery could be weak for months.

"There are always going to be bumps on the road to recovery," Obama said.

The Republicans hoping to unseat him pounced.

—Former Massachusetts Gov. Mitt Romney: "President Obama has failed to pull us out of this economic downturn."

—Former Minnesota Gov. Tim Pawlenty: "Obama's failure to address the tough challenges" is clear.

—Former House Speaker Newt Gingrich: "The administration's policies are failing."

Obama's political tendency is to take the longer view. An Associated Press-GfK poll less than a month ago, for example, showed rising public optimism about the economy and his stewardship.

Story: Romney points to job numbers as proof Obama fails

The election won't be just a referendum on Obama and the unemployment rate. It also will offer a choice between his economic ideas and his opponent's. Still, just as change worked for him last time, it can be used against him in 2012.

Even 8 percent unemployment, a goal once promoted by the administration, is hard to see now.

'Betting on you'
Presidents Jimmy Carter, Reagan and George H.W. Bush all faced unemployment rates higher than 7.5 percent in the final months of their re-election campaigns. Reagan won, and an important factor for him was that the jobless rate was declining at the time. Carter and Bush lost.

Obama, for now, has no reason to engage the politicians trying to win his job. He instead presents himself as the workers' champion who risked his own capital and their money in a successful bid to help Chrysler and General Motors survive and return to profitability.

"I'll tell you what. I'm going to keep betting on you," Obama told workers at a Chrysler plant in Toledo, Ohio.

And hope they'll do the same for him.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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