PORTSMOUTH, N.H. -- A disappointing August jobs report could wipe out any traditional bounce in the polls President Barack Obama might have gotten from the festive, well-choreographed three-day Democratic National Convention, making his hopes of holding on to his own job even more challenging.

That holds especially true in closely contested battleground states with painfully high levels of unemployment. The Nov. 6 presidential election pitting Obama against Republican Mitt Romney will not be decided by popular vote but in state-by-state contests, forcing an intense focus on states that do not reliably vote Republican or Democratic.

Accepting his party's nomination on the last night of the Democratic convention Thursday, Obama promised to strive, with help from Americans, to return the recession-scared United States to a path of economic fairness, robust growth and lower unemployment.

But Friday's bleak jobs news played into the hands of Republicans who claim that Obama's policies inhibit job production and made the economic picture worse.

"Did you see the jobs report this morning by the way?" Romney asked reporters in Sioux City, Iowa. "Almost 400,000 people dropped out of the work force altogether. It's is simply unimaginable."

The overall unemployment rate declined from 8.3 per cent to 8.1 per cent last month, but the "improvement" came only because more people gave up looking for work and therefore weren't counted in the government's calculation.

Just 96,000 new jobs were created in August, sharply down from the 141,000 the month before and below the threshold of 100,000 to 150,000 new jobs needed each month just to keep pace with working-age population growth.

No president has won re-election with unemployment over 8 per cent since Franklin D. Roosevelt.

"The broad message here is flat, flat, flat," said economist Heidi Shierholz with the labour-affiliated Economic Policy Center.

The jobs report complicates the electoral math for Obama and increases the political pressure on his campaign in battleground states with unemployment rates even higher than the national average. Nevada, for instance, has a 12 per cent jobless rate, North Carolina has 9.6 per cent, Michigan 9 per cent, Florida 8.8 per cent and Colorado 8.3 per cent. Those state figures are all for July, the most recent month available.

So far, Obama has generally held the edge in polls in many of these states.

Nationally, polls show only about half of America's decided voters support the president. Romney has the backing of the others, who believe his record as a successful businessman makes the Republican as the best candidate to solve the country's economic difficulties. Surveys show Obama holds a big lead on the question of which candidate voters most like and see as attuned to the needs of average Americans.

Overall, the candidates are neck-and-neck in what looks to be the closest presidential contest in recent memory. Polls show fewer than 10 per cent of voters are still undecided.

With the conventions over and their debates just ahead, Obama and Romney sprinted into the next phase of campaign, targeting eight or so toss-up states. The two men headed the same way Friday, appearing in Iowa and New Hampshire, two states with small but potentially decisive electoral prizes.

Obama was heading next to Florida, where he begins a bus tour Saturday.

The president criticized Romney's economic theory as being based on only one idea.

"Tax cuts. Tax cuts. Cut some more regulations. Oh, and more tax cuts," Obama said. "Tax cuts when times are good. Tax cuts when times are bad. Tax cuts to help you lose a few extra pounds. Tax cuts to help you improve your love life. It'll cure anything."

Romney countered by doubting Obama's competency, lumping together the jobs report and Obama's prime-time convention address.

"There was nothing in the speech that gives confidence that the president knows what he's doing when it comes to jobs," Romney told Fox News.

The Republican planned a visit Saturday to Virginia, a state Obama won in 2008 but which Romney hopes to carry in November.