JEFFREY BROWN:The August employment report came in today, showing fewer-than-anticipated jobs created, and fewer Americans still trying to find one. It was all fuel for the presidential campaign, with the conventions now over and 60 days to go until the election.

For the president and his party, the celebrations at the Democratic Convention yielded to sobering new numbers on a still struggling economy. U.S. employers did add 96,000 jobs in August, but that was well short of expectations.

In addition, revised numbers showed 41,000 fewer jobs were created in June and July than first estimated. And the key manufacturing sector dropped 15,000 workers, the largest decline in two years.

President Obama left Charlotte shortly after the report was released, traveling with Vice President Biden to Portsmouth, New Hampshire. There, he emphasized that, overall, the private sector is adding jobs.

PRESIDENT BARACK OBAMA: Today, we learned that after losing around 800,000 jobs a month when I took office, business once again added jobs for the 30th month in a row, a total of more than 4.6 million jobs.

(CHEERING AND APPLAUSE)

BARACK OBAMA:But—but that's not good enough. We know it's not good enough. We need to create more jobs faster. We need to fill the hole left by this recession faster. We need to come out of this crisis stronger.

(CHEERING AND APPLAUSE)

JEFFREY BROWN:And the president insisted all of that could happen much faster, provided Republicans in Congress are willing to work with him.

BARACK OBAMA:By the way, if the Republicans are serious about being concerned about joblessness, we could create a million new jobs right now if Congress would pass the jobs plan that I sent to them a year ago.

(CHEERING AND APPLAUSE)

BARACK OBAMA:Jobs for teachers, jobs for construction workers, jobs for folks who have been looking out—looking for work a long time. We can do that.

JEFFREY BROWN:For his part, Republican standard-bearer Mitt Romney traveled to the battleground state of Iowa and zeroed in on the unemployment rate. It fell in August from 8.3 percent to 8.1 percent, but that was largely because more people stopped looking for work.

MITT ROMNEY (R):After the party last night, the hangover today, the jobs numbers were very disappointing. For almost every net new job created, approximately four people dropped out of the work force. Seeing that kind of report is obviously disheartening to the American people who need work and are having a hard time finding work.

JEFFREY BROWN:Later, in Orange City, Iowa, Romney called it a—quote—"national tragedy" that unemployment has topped 8 percent for 43 straight months.

MITT ROMNEY:The president said by this time we'd be at 5.4 percent unemployment, 5.4 percent. Instead, we're at about 8 percent. And you know the difference that that makes and how many people would be working in America? Nine million people.

Had he been able to keep his promise, had his policies worked as he thought they would, there'd be nine million more Americans working.

JEFFREY BROWN:The president made his own trip to Iowa this evening to renew his convention appeal that Americans show patience and stick with him for another term.

BARACK OBAMA:After a decade of decline, this country created over half-a-million manufacturing jobs in the last two-and-a-half years.

(CHEERING AND APPLAUSE)

BARACK OBAMA:And now you have a choice. We can give more tax breaks to corporations that ship jobs overseas, or we can start rewarding companies that open new plants and train new workers and create new jobs here in the United States of America.

(CHEERS AND APPLAUSE)

BARACK OBAMA:We can help big factories and small businesses double their exports. And if we choose this path, we can create a million new manufacturing jobs in the next four years. You can make that happen. You can choose that future.

JEFFREY BROWN:Voters now have two months to ponder the competing arguments and two more jobs reports before the election. The second of those will be released on November 2, just five days before voting day.

In the last two weeks, we heard from two economists who explained and advocated the different approaches of Democrats and Republicans as the conventions approached.

NewsHour economics correspondent Paul Solman met Douglas Holtz-Eakin in Tampa ahead of the Republican gathering. Holtz-Eakin served on the Council of Economic Advisers under George W. Bush, and later as a top adviser to John McCain's 2008 presidential campaign. He's now president of the American Action Forum, a policy think tank.

The following week, Paul talked with Jared Bernstein in Charlotte. Bernstein served as chief economist and economic adviser to Vice President Biden from 2009 to 2011. He's now a senior fellow at the Center on Budget and Policy Priorities.

And with the conventions over and new jobs numbers out, we have brought the two men back. Neither holds an official position with the current presidential campaigns.

Welcome back.

JARED BERNSTEIN, former chief economist for Vice President Biden:Thank you, Jeff.

JEFFREY BROWN:Not a great report. Let's look at the numbers first.

Jared, you first. What do the numbers tell you?

JARED BERNSTEIN:Ninety-six thousand jobs in August. That is a weak report. It's a weak number. Expectations were for a higher number. The month before, we thought we added 163,000. It turns out we added 141,000, so a markdown, a revision downward of that.

The unemployment rate went down. That sounds good, right? Went down a couple of tenths. There's two ways an unemployment rate can go down, one because more people get jobs, and, two, because more people stop looking for jobs. They leave the labor market. This was the latter.

So, all in all, certainly not a strong report. The president can make the case, as he did, that it's month 30 of private sector job creation. So we are moving in the right direction, but I think the report says too slowly.

JEFFREY BROWN:All right, the numbers first.

DOUGLAS HOLTZ-EAKIN, former Congressional Budget Office director:Everything Jared said is right. It's a very weak report.

In addition to that, a litany of woes. If you look at hours worked, if you look at earnings per hour, those numbers flat or down, which means the income coming out of people who have jobs is not growing either.

I think the real problem is that this report was weak, but the previous three were also of this type, some sort of top-line number that looked good, like the unemployment rate going down, but inside reports that don't show income growth, reports that don't show people optimistic about their labor prospects.

JEFFREY BROWN:But before those three, there was a period where it was going up. Is there any way to read longer-term trends here? What...

JARED BERNSTEIN:That's exactly what I'm...

JEFFREY BROWN:It's confusing. Right?

JARED BERNSTEIN:That's what I was working on all morning. And here's what I have concluded.

If you look at the underlying growth rate of the economy, it's trucking along at about 2 percent. Now, that's about trend growth. This is GDP. And if you go back to the great recession, we were tanking at nightmarish rates. So, that's a good thing, to at least be on trend. We need to do better. But at least we're on trend.

The kinds of job numbers we have been posting are consistent with a trend GDP growth of around 2 percent. What is harder to explain is why a few quarters ago we were getting numbers that were twice the magnitude of this. I think that had to do with some technical problems with the seasonality. Productivity slowed down a little bit back then. It's faster now.

I think that these are actually consistent with an economy that is growing, but growing too slowly.

JEFFREY BROWN:You buy that?

DOUGLAS HOLTZ-EAKIN:... right. It's growing way too slowly.

I think he's optimistic at 2 percent. I think we're lower than that. I'm concerned about it, and I think we're weakening as we go into the fall, and that's a big concern.

JEFFREY BROWN:All right, now, I introduced you both with political experience. And you started this by raising how President Obama might react to this. So, what's your feeling? And put on that hat and how do numbers like this play into what we just watched over the last two weeks and the campaign?

DOUGLAS HOLTZ-EAKIN:The first thing is, you get your sound bite. You get your 30 months here. You will hear the Republicans talking about 43 straight months of unemployment above 8 percent.

But if you, again, look at when people start making up their minds about who they're going to vote for, this summer, June, July, August, is a critical period and there has been a series of weak reports and slow growth. That's not good news.

The reports from now to the election aren't going to change that very much unless they're very, very bad. The one thing that happens late in the game is an extremely bad event—think 2008 and the financial crisis. I went through that.

You see big swings. So the worst thing for the president would be to get a jobs report that actually had negative numbers, something like that.

JEFFREY BROWN:But, for now, not helping the president, obviously.

DOUGLAS HOLTZ-EAKIN:Obviously not helping.

JEFFREY BROWN:But you're thinking that maybe people have decided or sort of filtered in where these numbers are?

DOUGLAS HOLTZ-EAKIN:They pretty much feel the way they feel about these numbers, because they look like the previous numbers. They may continue to support the president or they may have given up and that's already been decided.

JARED BERNSTEIN:I think that's probably about right.

I mean, I think the difference is—and, again, I'm going to be speaking with a political hat on here—I think the difference is—or at least an economic policy hat.

(LAUGHTER)

JEFFREY BROWN:Yes? Will we know...

JARED BERNSTEIN:I don't know which hat I'm going to wear here.

(LAUGHTER)

JEFFREY BROWN:How will we know which line goes with which hat?

JARED BERNSTEIN:Because I want to make the distinction between the economic policies of the two sides.

And I think that does loom large in the next few months. The point here that the president continuously makes—and I think he's right—is that we're growing, but we're growing too slowly.

Contrast that with a set of ideas, supply-side, trickle-down economics, the tax cuts, all the stuff you heard about last week at the convention, big tax cuts at the top, big budget cuts, et cetera, and that's associated with a period where jobs grew much more slowly and in fact ultimately led to a great recession.

So while things are definitely moving along too slowly, the contrast of where we were and where we are, I do think is favorable to the president's argument.

JEFFREY BROWN:OK. That goes to what we heard over the last few weeks.

DOUGLAS HOLTZ-EAKIN:And the flip side to that is to say, well, the president doesn't want to talk about his record. He in fact spends a lot of time avoiding talking about his record. And he hasn't said one specific thing about what he would do in the second term, especially that is different from what he has done.

And so you will hear again and again—and I think correctly—well, it didn't work this time, and you have no other ideas? Come on. And so you're going to hear that a lot in the fall.

JEFFREY BROWN:You were in Tampa with Paul Solman. So then, at the convention, did you hear, did you hear what you wanted to hear from the Republican side? Did you hear something that helps what we have been talking about with the unemployment numbers?

DOUGLAS HOLTZ-EAKIN:I don't go to conventions to hear specifics. They're tent festivals for each party's idea. It's outside of that.

And you do see far more specifics out of the Republican ticket on tax reform, entitlement reform, ways to take on the debt crisis which is looming, and where we're just not hearing anything out of the Obama campaign.

JEFFREY BROWN:Do you—conversely, did you hear anything in the last week in Charlotte that gave you some hope that there is a policy?

JARED BERNSTEIN:I heard—I heard a lot more than Doug did.

And I agree that you're not going to get a lot of specifics there. So it's—I think it's probably wrong to criticize the conventions for not offering a ton of specifics. But last night—was it last night? It's all blending together.

I heard the president talk about an agenda including manufacturing, energy, education, and deficit reduction, and talked about it in a way that I think is convention-specific, the idea that these are the kinds of issues you want to work on in your second term.

And, in fact, one of the key lines there is, there is a role for government in all of those areas. And I think that stands in quite stark contrast with the Republican agenda, which, again, is very much cut taxes at the top, cross your fingers, hope it trickles down to everybody else. It hasn't worked in the past.

JEFFREY BROWN:You want to comment on that?

DOUGLAS HOLTZ-EAKIN:I think there's a lot more to the agenda.

You're hearing the political sound bite, the genius...

JARED BERNSTEIN:Well, I think...

DOUGLAS HOLTZ-EAKIN:The economic policy guys saying, oh, well, that's all it is.

In fact, the continual claim that we're going to back to policies that got us into this trouble is just at odds with the facts. Deregulation. Well, what was that deregulation? Sarbanes-Oxley, a bill so onerous, people thought it was too heavily regulatory.

JARED BERNSTEIN:Repealing the Affordable Care Act, repealing Dodd-Frank, that's what I'm talking about.

DOUGLAS HOLTZ-EAKIN:No, looking back, going back, right.

And so we hear this. We're going back to the policies that got us in trouble. I think that's at odd with the facts.

JEFFREY BROWN:All right, just in our last minute, I want to ask you about one other factor which, of course, is the Fed, outside of this—or is it outside of this political arena? That's part of the question.

But, last week, Chairman Bernanke gave a speech and he raised some real dire warning flags. They're meeting soon. Should they act? Do you think they will and should they?

DOUGLAS HOLTZ-EAKIN:I think they should get together, do a quick review of where we stand in this recovery, have a cup of coffee, and go home.

JEFFREY BROWN:Go home?

DOUGLAS HOLTZ-EAKIN:There's very little that they can do that will push this economy along. They're still well-positioned to stop bad news if something comes out of Europe. But they're not much they can do to push the economy forward.

I don't think that's what they will do. I think they will in fact act, because they have said so many times, if things are bad, we will act. And things are bad.

JARED BERNSTEIN:So, I think they should act and I think they will act.

And I think it's actually a credibility issue at this point. If you continually say, if things don't get better, if things get worse, we're going to pull the trigger—in this case, it's quantitative easing, some of the issues—some of their tools to help lower interest rates and inject more liquidity into the investment side of the economy.

If you continually say you're going to do that, and then we have had the kind of jobs report like this, and you don't do it, I actually think at some point it risks your credibility. And then credibility is important for the Fed.

JEFFREY BROWN: All right, we will leave it there.

Jared Bernstein, Douglas Holtz-Eakin, thanks.

DOUGLAS HOLTZ-EAKIN: Thanks.

JARED BERNSTEIN:Thank you, Jeff.