On Capitol Hill, the signs of a slowdown focused new attention on the economic implications of the partisan standoff over tax and spending policy. On the campaign trail, both sides saw the news as a potential turning point in a critical battle at this stage. The race may be a referendum on Mr. Obama, as Republicans want, or, as Democrats prefer, a choice between a president nursing the economy back to health and a challenger who represents the failed policies that caused the crisis in the first place.
Democrats in particular were left off balance, sensing that most of their policy ammunition has been spent and that Republicans have nothing to gain politically from lending a hand on a compromise that could spur economic growth this year.
“It’s going to be a close election. Everybody’s worried,” said Representative Jim Cooper, Democrat of Tennessee. “We’ve already floored the accelerator. We’ve already gripped the steering wheel. I’m not sure they’re attached to anything anymore.”
At a stop in Minneapolis, Mr. Obama renewed his call on Congress to enact measures to revive the economy, warning that they were needed not only to shake the United States out of its torpor, but to act as a buffer against storm clouds in Europe.
“Our economy is still facing some serious headwinds” from high gas prices and the financial crisis in Europe, he said from a factory floor at Honeywell International. Europe, in particular, he said, is “having an impact worldwide and is starting to cast a shadow on our own” recovery.
Mr. Romney fired back that the president was simply finding a new way to deflect blame for an economic malaise that his policies were prolonging. His campaign said that Mr. Romney’s core message that it was time for a change in economic stewardship would resonate more clearly among voters.
“This is the race that we came ready to run,” said Stuart Stevens, Mr. Romney’s chief strategist. “This is the race that we believed we would be in.”
The signs that the recovery is being derailed could further complicate maneuvering over the fiscal cliff the federal government faces at the end of the year. The government faces nearly $8 trillion in higher taxes and automatic spending cuts when all of the Bush-era tax cuts expire at the same time that $1.2 trillion of automatic spending cuts on military and domestic programs go into force in January.
Republicans have called for an extension of all those tax cuts and a cancellation of the military cuts, and said Friday that a weaker economy would make it all the more urgent to avoid tax increases this year. Mr. Obama and Congressional Democrats favor allowing tax cuts for the rich to expire and have stood firm on the automatic cuts.
“Instead of another campaign speech, the president might want to engage with Democrats and Republicans here on Capitol Hill to handle the big policies that are affecting our economy,” the House speaker, John A. Boehner of Ohio, said, citing the looming tax increases and spending cuts and the growing national debt.
Representative Nancy Pelosi of California, the House minority leader, said Friday that she saw no reason for Democrats to drop their insistence on allowing the Bush-era tax cuts to expire for upper-income households.
“Take the matter at hand and deal with it,” she said of the expiring tax cuts. “End the high-end tax cuts. They are deepening the deficit. They are not creating jobs. They have to go.”
Democrats are clearly worried. Senate and House Democratic strategists say many of their candidates in tough races cannot win if the president loses, and they said Mr. Obama’s message had drifted too often away from the economy toward issues intended to appeal to narrow groups, like the Violence Against Women Act, student loan subsidies and gay marriage.
Democrats said that Mr. Obama needed to refocus on job creation and amplify the message that much of his jobs program had been thwarted by Republicans.
“He needs to call the Republicans out,” said Representative Chris Van Hollen, Democrat of Maryland. “He needs to remind people he got zero help rescuing the economy when he came to office, and on these new jobs bills, the Republicans are simply trying to run out the clock.”
Representative Gerald E. Connolly, Democrat of Virginia, said Mr. Obama would have to work harder to make his case that the economy was recovering, even if the recovery is less robust than everyone had hoped.
“This is a contest of how we frame the economic question. The Republicans want to frame it one way; the White House wants to do it another way,” Mr. Connolly said. “There are going to be bumps along the way, no question about it. This month is a bump.” Washington Post