Not good news for the Bush campaign: Job growth has come in much lower than expected for two months straight. The Labor Department reported this morning that 32,000 new American jobs were created in July. 78,000 new jobs were added in June. This is in stark contrast to the torrid pace of job creation in May (248,000), April (346,000), and March (353,000). At least there was a silver lining in today's report. According to CNN.com,

The report shows that retailers had 19,000 fewer employees than a month earlier, but most other sectors showed slim growth. Manufacturing jobs were up by 10,000, while construction was up 4,000 and business and professional services added 42,000 jobs.

The report did show some signs of strength in secondary numbers in the report. Average hourly wages were up 5 cents to $15.70, in line with forecasts, and the average hourly work week rose 0.1 to 33.7 hours, which was just below the forecast of 33.8.

More importantly, the survey of households, used to compute the unemployment rate, showed 629,000 more people at work than in June. One economist said he believes this suggests problems with the employer survey.

"I don't have any faith that 32,000 jobs added reflects what's going on," said Mark Vitner, senior economist with Wachovia Securities, which had forecast a 280,000 gain in the payroll number. "The growing disconnect between the surveys is too much to dismiss."

The economic numbers of late are producing, as usual, confusion. The American manufacturing sector is booming, and has shown growth in the last 14 months straight. Personal incomes rose 0.2% in June, but consumer spending dropped 0.7% also in June. Oil prices have hit $44/barrel, the highest they’ve been since 1983. GDP growth is still strong (3.0%), but down from 4.5%. Business investment has been accelerating. What are we to conclude?

It is possible that high oil prices are putting a crimp in growth. Yes, its 2004, but we’re still a petroleum-based economy. Most everything that is produced by manufacturers needs to be shipped on planes, trains, and trucks – all burning petroleum. Even the services sector is tied to gasoline, as a lot of workers still drive to work. Another consideration is the fact that more people are self-employed, and the Labor Department hasn't really adjusted reporting techniques to account for these workers. Does two months of tepid job growth make for a trend? We’ll have to wait for next month’s job report to see.