President Barack Obama said the private sector is "doing fine" Friday, citing the slowdown in state and local government hiring, and calling on congressional Republicans to consider aid to them.

"We've created 4.3 million jobs over the past 27 months. The private sector is doing fine," said Obama. "Where were seeing weaknesses in our economy have to do with state and local government, oftentimes cuts initiated by, you know, governors or mayors who are not getting the kind of help that they have in the past from the federal government and who dont have the same kind of flexibility of the federal government in dealing with fewer revenues coming in."

Obama's comments about jobs growth have some bearing. The economy has gained about 4.2 million private sector jobs since early 2010, putting payroll at about the same level as it was in January 2009. Since Obama took office, about 607,000 fewer people work in the public sector. State and local governments, unlike the federal government, generally have to balance their budgets, and with fewer revenues, spending cuts have forced layoffs.

As a political matter, the remark had all of the makings of a gaffe. The economy is Obama's biggest weakness in his campaign for re-election, and the comment almost certainly did not help the president's standing.

GOP presidential candidate Mitt Romney, who has had his his share of poorly phrased statements about being "not concerned about the very poor" and liking to fire people when talking about choice in health care, jumped on the comment.

"He said the private sector is doing fine. Is he really that out of touch?" Romney said in Iowa. "I think he's defining what it means to be out of touch with the American people."

Said Romney, "For the president of the United States to stand up and say the private sector is doing fine is going to go down in history as an extraordinary miscalculation."

Time will tell whether that will be the case. Romney's gaffes during the primary have spun through news cycles and have largely faded into the background -- suddenly all of the chatter in Washington is that the former Massachusetts governor could actually win the election. But, the anemic job growth of last Friday and the European crisis are very troubling economic signs that could get worse.

UPDATE: The president sought to clarify his remarks later Friday, saying it is "absolutely clear the economy is not doing fine." He continued, "Thats the reason I had a press conference. Thats why I spent yesterday, the day before yesterday, this past week, this past month and this past year talking about how we can make the economy stronger. The economy is not doing fine. There are too many people out of work. The housing market is still weak, too many homes underwater and thats precisely why I asked Congress to start taking some steps that can make a difference."