AP

WASHINGTON PRESIDENT Barack Obama found hope for the US economy in new jobs numbers on Friday, but Republican challenger Mitt Romney pounced on the slight increase in the country’s unemployment rate, calling it a “hammer blow” to middle-class families.

The monthly report has become the most closely watched measure of the economy’s fate in a tight presidential race that is sharply focused on the slow recovery from the Great Recession.

The better-than-expected numbers showed that private employers added 163,000 jobs in July, the best pace of hiring in five months. The jobless rate rose, however, to 8.3 percent from 8.2 percent in June.

No US president since World War II has faced reelection with unemployment over 8 percent.

Both candidates will be carefully watching the handful of monthly reports remaining as the November election approaches.

“We’ve now gone 42 consecutive months with the unemployment rate above 8 percent,” Romney said in a statement.

“Middle-class Americans deserve better, and I believe America can do better.” Romney was campaigning in Nevada, the state with the nation’s highest unemployment rate, before heading to fund-raise in Idaho.

Obama’s campaign focused its attention on the 29th straight month of private sector job growth.

Campaign spokesman Ben LaBolt said Romney’s pledge to make “severe cuts” in the budget “would slow economic growth and could lead to another recession.”

The economy is by far the top issue as voters remain worried about the slow recovery from the Great Recession.

While the overall race for the White House remains deadlocked, several polls show Romney with an advantage over Obama on economic issues.

Obama, while acknowledging that economic growth hasn’t come fast enough, has sought to convince voters that the situation could have been far worse.

He puts some of the blame for the sluggish recovery on congressional Republicans, accusing them of blocking his proposals for creating jobs.

The economy’s trajectory of late hasn’t given the White House anything to celebrate.

The US economy grew at a listless 1.5 percent annual pace from April through June, even slower than the 2 percent rate in the first three months of the year.

The slide comes after the optimism of early 2012, when the first three months of job growth averaged more than 225,000 a month.

In the razor-close race, a USA Today/Gallup Poll conducted in late July found 50 percent of Americans said Romney is the candidate who would be better at job creation, with 44 percent siding with Obama.

Romney on Thursday likened Obama to a “dog trying to chase its tail” when it comes to strengthening the sluggish economic recovery.

He said his economic policies would lead to creation of 12 million jobs over the first four years.

His plan included several broad ideas but few specifics.

Firing back quickly, Obama said his rival favours “trickledown fairy dust” that has failed to fix the economy in the past.

He released a new television ad with a scathing summation of Romney’s tax plans: “He pays less. You pay more.”

Obama says the Republican’s call for extending cuts for upper-income earners would mean higher tax bills for the middle class.