By KEN THOMAS and PHILIP ELLIOTT, Associated Press
WASHINGTON (AP) — President Barack Obama declared Friday that "the private sector is doing fine," drawing instant criticism from Republicans who said it showed a lack of understanding of the nation's economic woes.
GOP presidential candidate Mitt Romney responded, "Is he really that out of touch?"
Reacting to the GOP critique, the president later sought to clarify his remarks, saying that it was "absolutely clear that the economy is not doing fine." He said that while there had been some "good momentum" in the private sector, public sector growth lagged behind, making it imperative that Congress act on his proposals to boost state and local government jobs.
"I cannot give you a good reason why Congress would not act on these items other than politics," Obama said after being asked to respond to the Republican criticism.
The president made similar assertions in a White House news conference Friday morning, saying that businesses had created 4.3 million jobs during the past 27 months and the primary problem with employment is that state and local governments had been forced to cut jobs in the private sector.
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Romney, holding a campaign event in Council Bluffs, Iowa, said Obama's remark was "defining what it means to be detached and out of touch with the American people." He said the comment "is going to go down in history as an extraordinary miscalculation and misunderstanding."
But while "doing fine" is in the eye of the beholder, Obama was correct that the job picture in the private sector is brighter than in the public sector. Since the recession officially ended in June 2009, private companies have added 3.1 million jobs. Largely because of cuts at the state and local level, governments have slashed 601,000 jobs over the same period. According to the government, corporate profits have risen 58 percent since mid-2009.
Even so, by historical standards, private job gains in the last three months have been weak after such a deep recession.
Obama pressed Congress to enact parts of his jobs agenda, including proposals to help state governments rehire teachers, police officers and firefighters. Yet his comments about the strength of private sector hiring were bound to be replayed in television ads meant to discredit his message on the economy, the top issue for voters.
Seconds after Obama made the remark, Republicans circulated the quote on Twitter and Romney seized on it about an hour later after meeting farmers.
Behind the scenes, Romney aides worked furiously to push what they hope could be a shift in the campaign. Many remember four years ago, when Republican nominee John McCain asserted that "the fundamentals of our economy are strong" in the midst of a meltdown. Obama's team went after McCain then and voters were left wondering what the Republican was thinking.
Using a similar approach, the Republican National Committee posted an online video by midday repeating Obama's comment and asking: "How can President Obama fix our economy if he doesn't understand what's broken?"
The question was a direct rehash of the one Obama's campaign asked voters in a very similar video four years ago.
Obama campaign spokesman Ben LaBolt said Obama had taken office "in the midst of a severe economic crisis and fought back against that to the point where businesses have now created more than 4.3 million private sector jobs. The president has always been clear that we need to do more than recover from the recession." He later said on Twitter, "Being called out of touch by a candidate who joked about being unemployed and said he likes to fire people is rich."
Obama and his campaign did some cherry-picking to come up with their figure of 4.3 million new private jobs. They counted from the low point for the private sector, in February 2010, ignoring huge job losses in the first year of his presidency. Counting from the end of the recession, private-sector job growth was considerably smaller.
The president's re-election campaign has been in a rough patch lately. A bleak jobs report last week showed the economy added just 69,000 jobs in May and the unemployment rate ticked up to 8.2 percent, which can't help Obama's prospects in a race expected to hinge largely on the economy.
"Are you kidding?" asked House Majority Leader Eric Cantor, R-Va. "Did he see the job numbers that came out last week? The private sector is not doing fine."
The episode also followed Republican Gov. Scott Walker's victory in a Democratic-led, union-backed recall effort in Wisconsin, and Romney's lead over Obama in May fundraising. Romney's campaign and the Republican National Committee said Thursday they had raised more than $76 million combined in May, surpassing the $60 million haul by the Obama campaign and the Democratic National Committee.
During a White House news conference Friday, Obama pointed to Republicans in Congress for holding up portions of his jobs bill, which he said could have led to 1 million more jobs this year if it had been passed in full.
"The private sector is doing fine," Obama said. Economic weakness is coming from state and local government, with job cuts initiated by "governors or mayors who are not getting the kind of help that they have in the past from the federal government and who don't have the same kind of flexibility as the federal government in dealing with fewer revenues coming in."
He said that if Republicans really want to put people back to work, "what they should be thinking about is how do we help state and local governments and how do we help the construction industry."
Elliott reported from Council Bluffs, Iowa. Associated Press writers Paul Wiseman, Christopher S. Rugaber and Tom Raum contributed to this report.