In June, the economy added only 80,000 jobs, far fewer than were expected.
While the disappointing report could be a potential setback for the president, he insists the economy is slowly getting back on track.
"We knew from the start that turning around wasn't going to happen overnight," the president said.
For his republican rival, it was fuel for the fight.
"It is another kick in the gut for middle class families," said Romney.
The unemployment rate remains at 8.2 percent, which is considered a recession-level figure. No president since World War II has faced reelection with unemployment over 8 percent.
But the president called the jobs numbers, especially in the private sector, a step in the right direction. Romney says they show Mr. Obama is out of touch.
"The president's policies have not gotten America working again, and the president is going to have to stand up and take responsibility for it," said Romeny.
On the stump, the president pointed the finger right back at Romney.
"Look, his companies that he started were called the pioneers of business outsourcing," he said.
While voters are angry about the stagnant economy, political analysts say many are still undecided. Recent polls show the two candidates are in an almost dead heat.
"They're frustrated things aren't getting better faster, but don't know if Romney is the person to bring it back," said ABC News political director Amy Walter.
This is the third consecutive month of weak job growth. One economic analyst says the labor market is treading water, and another says it's highly unlikely unemployment will drop below 8 percent before election day.