Reacting to this morning’s weak jobs report, President Obama admitted the economy is not creating jobs “as fast as we want,” but was confident that the country has better days ahead…

“We knew the road to recovery would not be easy. We knew it would take time. We knew there would be ups and downs along the way. But we also knew if we were willing to act wisely and boldly and if we were acting together as Americans, if we were willing to keep at it, if we were willing to roll up our sleeves and never quit, then we wouldn’t just come back; we’d come back stronger than ever,” the president, in shirt-sleeves, said to applause.

Market participants bolted out of risky equity and commodity markets on Friday amid fresh evidence that many of the world’s biggest economies are losing momentum at a dramatic pace. The blue chips erased their 2012 rally and the broader S&P 500 tumbled to the brink of correction territory.

The Dow Jones Industrial Average plummeted 275 points, or 2.2%, to 12119, the S&P 500 tumbled 32.3 points, or 2.5%, to 1278 and the Nasdaq Composite sold off by 79.9 points, or 2.8%, to 2747…

Of particular concern to many market participants was that Germany, Europe’s biggest economy, which has been generally resilient to headwinds from the debt crisis, saw its biggest deterioration in manufacturing since June 2009. That is an indication, analysts say, that the debt debacle is bleeding into core economies. A separate report from Eurostat showed the unemployment rate across the eurozone was steady at 11%, a record high, in April.

Forecasts from Moody’s Analytics, which we are updating weekly on this blog, now suggest that average monthly job growth in the six months before the election will be 157,000…

Going by history, monthly job growth of 157,000 would suggest that the economy would be roughly neutral in the presidential race, pointing to a very close election. But there is no question that the odds of a 2012 mini-boom that would help President Obama have fallen markedly in the last few months. And unless job growth accelerates substantially – and quickly – from its May pace, the economy will make Mitt Romney, the presumptive Republican nominee, a favorite.

“The bottom line is that the U.S. recovery has hit another wall,” the Moody’s economists wrote.

The big question now: Does this report suggest the U.S economy is heading into recession, especially given the sharp slowdown in global economic activity from Europe to India to, perhaps most worrisome, China?

Consider this: Last year, the U.S. grew at just a 1.7% pace. Research from the Federal Reserve finds that that since 1947 when year-over-year real GDP growth falls below 2 percent, recession follows within a year 70 percent of the time. We are firmly within the Recession Red Zone.

The political implications are clear: If the White House wasn’t already in a panic about the spring swoon, it sure is now. Another Recovery Bummer. If you punch in a mild recession into the higher regarded Fair-Yale forecasting model, Mitt Romney wins 53-47 over Obama in the two-party vote share. But given the example of Jimmy Carter, who suffered a mild recession in his 1980 reelection year, the Fair model might be underestimating the damage to Obama from a double dip.

Indeed, the American economy as a whole has had a strong tendency to revert to the mean since we officially exited the recession in June 2009. Promising economic quarters have been followed by negative surprises. The reverse to some extent has also been true: the set of relatively good jobs numbers that were printed in January through March came after a difficult period in late 2011 when fears of recession were increasing.

In general, however, the lows have been lower than the highs have been high. At no point in the past three years has the economy shown sustained growth above the long-term trend, as it will eventually need to do to make up for the loss in productivity and jobs it suffered during the recession…

The concern for Mr. Obama, however, is not so much what might happen if the election were held today but what will happen in November. The economic news in recent weeks has been poor enough to suggest that if the economy finally breaks from its pattern of tepid growth in the second half of the year, it could be toward the downside.

There is no vision from Team Obama about how to fix this mess, beyond these warmed-over proposals that made up the core of the (broadly unpopular) stimulus bill. What happens in a second term with the economy? Do we just keep limping on, while the president continually blames his predecessor, pushes small ball (and obviously poll-tested) proposals, and tries to pump more money into Democratic constituencies like the teachers and craft unions? I understand the political need to blame Bush, but there has to be more…

If he does not do something else, he is going to lose. I’ll put it this way: Talking up this lousy economy + blaming Bush + cow-towing to Democratic constituencies + castigating Romney as the bane of all that is holy = 47 to 48 percent of the vote, and maybe 225 electoral college votes.

Via the Daily Rushbo.

Mitt Romney was just on CNBC, where he blasted Barack Obama on the jobs report. Notable quotable:

“Jobs are job one for the presidency.”