Barack Obama, US president, called for new infrastructure investments in the US to revitalise the stagnant economy and boost the beleaguered labour market.

Speaking after new data showed US private sector jobs growth slowed in August, the president urged Congress to pass an extension of a federal transportation spending bill that expires at the end of September.

Mr Obama said that failure to do so would put thousands of jobs at risk and delay vital infrastructure projects and funding for the nation’s highways and airports.

“It’s inexcusable to put more jobs at risk in an industry that’s already been one of the hardest hit in the last decade,” the president said on Wednesday in comments at the White House.

“We shouldn’t just be playing patch-up or catch-up, we should be leading the world,” he said.

A report from ADP, the payroll processor, said US companies added 91,000 jobs in August, missing expectations of 100,000 new jobs and coming in below the downwardly revised 109,000 positions created in July.

The data “suggests that the trend in employment moderated somewhat in August at a pace below what would be consistent with a stable unemployment rate,” said Joel Prakken, chairman of Macroeconomic Advisers, which produces the ADP report.

Jobs growth was concentrated at small and medium-sized businesses, which added 58,000 and 30,000 positions respectively, while businesses employing more than 500 workers hired just 3,000 new employees. Expansion was once again stronger in the service industry than the goods-producing sector, while manufacturers cut 4,000 jobs. Construction hiring picked up for the first time in four months, rising by 7,000.

Wednesday’s figures come ahead of the government’s closely watched employment report, due on Friday, which is expected to show the economy added 75,000 jobs in August, with 103,000 new private sector positions offsetting an expected decline in government payrolls. The unemployment rate is forecast to remain at an elevated 9.1 per cent.

The official tally of private sector jobs is expected to come in below July’s 154,000 rate in part because of a strike at Verizon Communications, the telecoms group, noted John Ryding and Conrad DeQuadros of RDQ Economics, an independent research group.

But Mr Prakken said ADP’s data did not reflect the impact of the strike. “It seems to me Friday’s number [from the bureau of labour statistics] could be a good deal weaker than the number we’re reporting today,” he said.

As US economic growth has stalled to a lacklustre annualised rate of 1 per cent in the second quarter, following an even more meagre 0.4 per cent in the first three months of 2011, the Obama administration has come under increased pressure to take steps to jump-start growth and reduce unemployment.

Mr Obama is due to give a broader economic policy speech before a joint session of Congress on September 7 in which he is being urged to set out proposals including extending a payroll tax cut for middle- and low-income workers, boosting infrastructure and green energy spending and tackling the persistent foreclosures crisis.

Amid the widening gap between Republicans and Democrats, business leaders have expressed frustration with the gridlock in Washington. In an interview with the Financial Times, Doug Oberhelman, chief executive of Caterpillar said he feared that pending bills including the transportation funding legislation and bilateral trade agreements could be derailed by partisan bickering.

On Monday the president appointed Alan Kreuger, a leading labour market economist, as chairman of the Council of Economic Advisers, signalling the White House’s intent to raise its game in the battle for jobs.

In a speech last week, Federal Reserve chairman Ben Bernanke expressed alarm about the high rate of long-term unemployment, which he said could leave a “major scar” on the US economy. But he cautioned that most measures to spur growth and job creation are “outside the province of the central bank”.

Minutes of the Fed’s latest policy meeting showed division among members of the rate-setting Federal Open Market Committee over further action to stimulate the economy through another round of quantitative easing, known in the markets as “QE3”.

A separate report on Wednesday showed that planned lay-offs by US employers fell back after three months of increases, according to Challenger, Gray & Christmas, the placement company.

Companies announced 51,114 job cuts in August, a 23 per cent drop from July’s 16-month high, which was driven by large-scale redundancies at a handful of large companies. It was the first time in four months that the pace of lay-offs had eased, but the report noted that August’s figure was 47 per cent higher than a year ago – an indication of the protracted slowdown in the US economy this year.

August’s lay-offs were driven by the public sector, with government cuts nearly doubling to 18,426, concentrated in federal payrolls including the military.

“More workforce reductions at the federal level are undoubtedly coming down the road. Congress and the White House are under immense pressure to cut federal budgets and while the heaviest cuts are due in 2014, we will probably begin seeing some fallout starting this year and into 2012,” said John Challenger, chief executive.

“Meanwhile, the private sector is still being hampered by low consumer and business spending. While we do not see any indication of a sudden resurgence in private sector job cuts, conditions definitely are not ideal for hiring,” he added.

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