Obama: Japan, Europe and fuel pose economic risks

Sat Jun 4, 2011 6:00am EDT

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* Obama says U.S. economy faces tough head winds

* Republican Alexander calls for flexibility with unions

By Jeff Mason

WASHINGTON, June 4 (Reuters) - President Barack Obama is pointing to problems in Japan and Europe as challenges for the U.S. economy, placing some blame on events abroad for a domestic recovery that is showing signs of slowing down.

Government data released on Friday showed employers in May hired the fewest number of workers in eight months and U.S. unemployment rose to 9.1 percent, up from 9.0 percent in April. [ID:nOAT004818]

That bump is a political challenge for the president, whose re-election in 2012 may depend on his ability to convince voters that his economic policies have been successful.

Part of his pitch will include steering attention to outside forces as causes for economic woes at home.

The president did just that in his weekly radio and Internet address, broadcast on Saturday, by highlighting "head winds" that are affecting the United States.

"Even though our economy has created more than two million private sector jobs over the past 15 months and continues to grow, we're facing some tough head winds," he said.

"Lately, it's high gas prices, the earthquake in Japan, and unease about the European fiscal situation. That will happen from time to time. There will be bumps on the road to recovery."

Republicans have zeroed in on those bumps, too, saying they are evidence that Obama's policies are not working.

Republican Senator Lamar Alexander, in his party's radio address, emphasized the need for more private sector job growth and flexibility with unions -- a key constituency for Obama's Democrats.

"Our goal should be to make it easier and cheaper to create private-sector jobs in this country," Alexander said. "Giving workers the right to join or not to join a union helps to create a competitive environment in which more manufacturers like Nissan and Boeing can make here what they sell here."

Weakness in private sector job growth is becoming a key talking point for Republicans, who see it as as a vulnerability for Obama ahead of the 2012 election.

The president, meanwhile, repeated his case that his administration's policies have helped job growth in the U.S. auto industry, revived from near collapse with the support of government bailouts.

"All three American automakers are now adding shifts and creating jobs at the strongest rate since the 1990s," he said.

"That's remarkable when you think about where we were just a couple of years ago."

Obama on Friday greeted workers and toured a Chrysler plant in Toledo, Ohio, as he reminded voters that his 2009 auto bailout saved thousands of U.S. jobs. [ID:nN03121352]

(Editing by Will Dunham)

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