According to the Labor Department, the overall jobless rate in August actually declined 0.1 per cent to 7.6 per cent. But the finding that sent new shivers through both financial markets and the Bush campaign was a 97,000 drop in the number of factory jobs - the biggest such fall in eight months.
The August figures would have been worse still but for a temporary boost of 100,000 jobs created under an emergency summer programme funded by the federal government. This ends in September however. And next month's figures, the last to be released before 3 November, will furthermore include people thrown out of work by Hurricane Andrew, and people affected by current strikes and layoffs at General Motors.
The unemployment news, on top of an unexpected fall in planned purchases by US factories last month, leaves no doubt that the economy, whose growth slowed to 1.4 per cent in the second quarter, will still be mired in near-recession on polling day.
As Republican strategists know only too well, no incumbent President in modern times has won a second term when unemployment is rising, average income falling, and growth is next to non-existent. By an enormous 88-12 margin, a Cable News Network poll yesterday gave Bill Clinton, the Democratic challenger, better marks on the economy than Mr Bush.
By the close in New York, the dollar had dropped 1.38 pfennigs against the German mark to DM1.4017 and 1.3 cents against the pound to pounds 1.9960, amid fears that the Federal Reserve will be tempted to cut interest rates still further to kindle growth. But most analysts believe that the extreme weakness of the dollar makes such a step impossible, however much Mr Bush may press for it.
In itself, the recent slide of the dollar to historic lows is no bad thing for exports and therefore the economy - and by extension for the Bush campaign. This could change, however, if it triggers a crisis of confidence on Wall Street, whose traditional faith in Republican management of the economy is already seriously frayed. Ominously, stocks were nine points lower in New York by mid-session.
Meanwhile, the regular four-yearly sparring over the schedule and format of the planned candidates debates this autumn is in full swing. The first of three is to be held in Lansing, Michigan on 22 September. The Bush camp is raising objections, but Mr Clinton's aides say that whatever happens, he will be there on the appointed day.
The signs are that the former Secretary of State, James Baker, now in overall charge of the President's campaign, wants only two debates. But as underdog, Mr Bush stands only to gain from direct confrontation with Mr Clinton. The betting is that after further jockeying and prevarication, the first debate will go ahead as scheduled. Their final number may be cut, however.
But the Republicans are counter-attacking on the perceived weak spot of Governor Clinton's Vietnam draft record. The Democratic candidate yesterday admitted that he had been informed of an uncle's lobbying efforts back in 1968 to delay his induction to allow him to take up a Rhodes Scholarship at Oxford.
'The time has come for Mr Clinton to come clean about what happened,' said Charles Black, a top Bush campaign adviser, arguing that he had changed his story several times already this year. The draft issue, Republicans believe, will allow them to contrast Mr Clinton with George Bush the Second World War navy pilot hero, and paint him as undeserving of the presidency.
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