The Economy: Happy Days Are Here Again!

Oh. Wait. No they're not.

Job Growth Grinds Nearly to Halt in July, Labor Dept. Reports

Job growth ground nearly to a halt last month, the Labor Department reported Friday, in a new sign that the economy has weakened in recent months.

Employers added just 32,000 jobs in July, a small fraction of what forecasters had expected and the smallest gain this year. The government also announced that job growth in May and June was less than initially estimated.

Stocks fell broadly after the report was issued, with the Standard & Poor's 500 index and the Dow Jones industrial average down almost 1 percent in early afternoon trading in New York. The dollar dropped against the euro, and interest rates declined, too, although many economists continue to expect the Federal Reserve to raise its benchmark short-term rate next week.

The new report creates a nettlesome political situation for President Bush, who had pointed to the strong job gains earlier this year as a result of the tax cuts he had championed. The weak job growth of the last two months means that he is now highly likely to stand for re-election with an employment level lower than when he took office, the first time that has happened in 72 years, when Herbert Hoover lost to Franklin D. Roosevelt in 1932 amid Depression-era job losses far greater than any experienced in recent times.