** The unemployment rate declines for the first time in 15 months…
**As Senate heads to recess, voters are having their say on health care...
**President Obama does his part to help Virginia Democratic gubernatorial candidate Creigh Deeds...
"It was a better-than-expected showing that offered a strong signal that the country's recession is finally ending.
"The new snapshot, released by the Labor Department on Friday, also offered other encouraging news: workers' hours nudged up after sinking to a record low in June, and paychecks grew after having fallen or flat lined in some cases.
"To be sure, the report still indicates that the jobs market is on shaky ground. But the new figures were better than many analysts were expecting and offered welcomed improvements to a part of the economy that has been clobbered by the recession.
"Analysts were forecasting job losses to slow to around 320,000 and the unemployment rate to tick up to 9.6 percent.
"The dip in the unemployment rate from June's 9.5 percent was the first since April 2008. One of the reasons the rate went down, however, was because hundreds of thousands of people left the labor force. Fewer people, though, did report being unemployed."
Politico's Eamon Javers points out, "The White House is playing a delicate expectations game as it braces for Friday's release of the nation's unemployment rate.
"White House press secretary Robert Gibbs was eager to talk about the 10 percent figure during his last press briefing before the new number comes out. By putting the number on the table, the White House can still position the unemployment number as a win in the daily media cycle Friday if it falls short of that.
"Here's why the tactic might work: Most economists believe the number will go higher Friday, but probably won't hit the symbolically important double-digit number. Which means the media will give it shorter shrift, and the White House might be able to spin it as a victory of sorts.
"Most presidents soon come to realize that symbolic thresholds and round numbers have a special fascination for the press corps. Press coverage of 10 percent unemployment, if it comes, will be intense."
"Even as the Obama administration braces for another grim report about job losses on Friday, economists say that the president's $787 billion stimulus package has helped blunt the downturn in limited but discernible ways," adds the New York Times' Edmund L. Andrews. "A report card on the stimulus plan offered by analysts nearly six months after it was passed by Congress suggests that the punch from increased government spending has helped the economy begin to bottom out faster than it would have otherwise. The tax cuts included in the plan, economists said, have had less of an impact because people tended to save the money or use it to pay down debt rather than spend it…
"White House officials estimate that the stimulus program pumped about $100 billion into the economy through June. That was only a small share of the total projected spending, and much of the first wave came in the form of tax cuts, tax rebates and higher spending on safety-net programs like unemployment benefits and health care.
"Private analysts say they think it added at least 1 percentage point to economic growth in the second quarter. That was not enough to prevent the economy from shrinking and joblessness from rising, but the pace of the decline slowed substantially compared with the first quarter."
5215995HEALTH CARE: "Senators headed home for their August break Thursday amid an escalating partisan battle over health-care reform, with a small band of lawmakers hoping to keep their delicately negotiated compromise alive until Congress reconvenes in September," reports the Washington Post's Shailagh Murray. "Sen. Olympia J. Snowe (R-Maine), a key negotiator, said she was so alarmed about distortions involving the deal being developed by members of the Finance Committee that she urged President Obama during a visit to the White House on Thursday to rebut conservative allegations, 'to lessen the concern' about the emerging legislation.
"'It's getting above the din of the roar that's out there throughout America,' Snowe said. 'I said to the president, 'You have to take practical approaches. . . . People need to know it's not going to be a government-run decision-making process for their medical needs. They need to know that the doctor-patient relationship is going to be preserved.'
"Top Obama aides promised Senate Democrats that the White House would defend them on health care if opponents attack, part of an organized effort to arm Democrats as they head out of town for the August break," adds the Wall Street Journal's Laura Meckler. "At a closed-door meeting Thursday with senators, White House senior adviser David Axelrod presented polling data that he said showed the administration's new message focused on consumer protections was effective, particularly with swing voters.
"And White House Deputy Chief of Staff Jim Messina said Democratic senators who are attacked for supporting the health-care bill can count on the White House to help organize local doctors, nurses, religious leaders and others to come to their defense.
"'If you get hit, we will punch back twice as hard,' Mr. Messina told senators, according to two people in the room…
"The White House plans to start a Web site to 'fight the smears' and 'rebut the whisper campaign' against the health-care legislation, a White House official said. White House officials and their allies also are encouraging activists on their side to show up at town hall meetings, where boisterous opponents have been shouting down members of Congress.
"At Thursday's meeting, each Democratic senator received a 'message card' prepared by the White House with talking points on health care and state-specific information about the rising cost of care."
"Republicans answered back. 'All the polls show there is serious concern, if not outright opposition, to the president's health care plan,' said Antonia Ferrier, spokeswoman for House Republican Leader John Boehner of Ohio. 'Democrats are ginning up this cynical shell game.'
"Also Thursday, the AFL-CIO announced plans to mobilize labor activists to attend town hall meetings in 50 congressional districts this month to counter the conservative protesters."
More on health care opponents: Politico's Mike Allen, "Groups coordinate Obama opposition"
Detroit Free Press' Patricia Anstett and Kathleen Gray, "Tempers flare over health care plan"
Politico's Victoria McGrane, "Fear and loathing at New York town hall"
Meantime, "Senior members of the Senate Finance Committee, trying to put together a bipartisan bill to guarantee health insurance for all Americans, were told Thursday that their proposals might be unaffordable to states and to many low-income people," report the New York Times' Robert Pear and David M. Herszenhorn. "Governors expressed concern about the cost to states, while Democratic senators said they were worried about the cost to those of modest means.
"The emerging legislation would expand Medicaid, the federal-state program, to cover millions of additional people. It would also offer premium subsidies, in the form of tax credits, to people with incomes just above the Medicaid cutoff so they could buy private insurance.
"A bipartisan group of six senators, led by Max Baucus, Democrat of Montana, the chairman of the Finance Committee, held a telephone conference call on Thursday with about a dozen governors.
"After the call, Mr. Baucus said that it would be impossible for the federal government to pick up all the costs for new Medicaid recipients and that states would have to bear some of the costs.
"Governors said they had pushed back hard against this idea, which they describe as an unfunded mandate."
New York Times' Clifford Krauss, "Governors Fear Added Costs in Health Care Overhaul"
Politico's Jonathan Martin, "Rahm Emanuel warns liberal groups to stop ads"
New York Times' Katherine Q. Seelye, "Over the Airwaves and on Cable TV, Health Care Dominates"
Bloomberg News' Edwin Chen, "Obama Open to Creation of Health Cooperatives, DeParle Says"
Washington Post's Alec MacGilis, "Democrats Weigh the Calculus of Public Health Insurance"
New York Times' David D. Kirkpatrick, "Democrats Say No to Cost Cap for Drug Manufacturers"
Politics Daily's Jill Lawrence, "Obama and Congress Shouldn't Let Polls Guide Health Reform"
5216266VIRGINIA GOVERNORS RACE: " President Obama went to Northern Virginia on Thursday night to provide a midsummer boost to state Sen. R. Creigh Deeds' campaign for governor," reports the Washington Times' Sarah Abruzzese. "It was the president's first joint-appearance with Mr. Deeds, whose campaign has gotten off to a slow start since his surprising come-from-behind primary victory two months ago.
"Mr. Obama spoke fondly of Mr. Deeds, noting their similar histories as state senators for eight years, their fatherhood of daughters and their odd names.
"'Creigh Deeds and I both have, let's face it, sort of funny names - still trying to figure out the spelling of Creigh,' the president said to the more than 1,000 delighted Democratic supporters at the McLean Hilton in Tysons Corner."
"Obama could prove critical in revving up Democratic voters for Deeds, sparking interest among some of the thousands of new ones who were inspired by his campaign last year," writes the Washington Post's Rosalind S. Helderman. "His endorsement could be particularly useful in convincing young voters and African Americans that they should support Deeds.
"In the race for attorney general four years ago, Deeds lost to Republican Robert F. McDonnell by 360 votes. Deeds's vote totals in majority-black districts lagged behind Kaine's. He faces McDonnell for the state's top job, and this time he hopes to boost his support in areas that saw record turnout for Obama.
"Obama, making his first appearance in a race being watched for national implications, raised money for Deeds before rallying supporters in the vote-rich Washington, D.C., suburbs," adds Politico's Jonathan Martin.
"He likely didn't need any, but Obama was surrounded by reminders of his hard-fought win here last year – a victory that ended a 44-year streak of Republican presidential dominance in the state…
"For all the nostalgia, though, it's difficult to transfer political enthusiasm and Deeds has yet to lock down either Virginia's growing Democratic base or the centrist swing voters who are critical to statewide success. He trails former Attorney General Bob McDonnell, the GOP nominee, in recent polls.
"'Let's be honest,' Obama said to about 200 donors at the $2,400 per-person reception before the rally. 'This is going to be a tough race.' ...
"[L]ike some past statewide Democratic candidates, Deeds is struggling with Republican efforts to make him account for positions taken by the more liberal national party. So far, Deeds has sidestepped the effort to link him to Obama's healthcare, energy and labor policies by noting that he's running for state, not federal, office…
"[W]hen Obama took the stage, he used the portion of his address devoted to national issues to offer a robust defense of the stimulus act, even citing local highway projects in the traffic-choked region, but said little about healthcare, the center piece of his legislative agenda."
New York Times' Adam Nagourney, "State Races Seen as Tests for Obama"
She will take part in two ceremonies: the first, official, swearing-in will happen behind closed doors, with only her family present, at the Supreme Court. A second, more open swearing-in ceremony, will include reporters and, according to the Court's spokeswoman Kathy Arberg, TV cameras, for the first time.
More on Sotomayor below...
Also this weekend, President Obama heads to Mexico on Sunday for a two-day summit with leaders of Canada and Mexico.
"Border security, the drug war and arms smuggling will join trade and the recession on the agenda of President Barack Obama's first 'three amigos' summit with the leaders of Mexico and Canada this weekend in Mexico," reports Reuters' Patricia Zengerle. "With Mexican gangs dominating the drug trade over the U.S. border and up into Canada, and violence -- often with U.S.-made weapons -- spreading north, security is in the news in all three countries, as much, if not more, than trade, economic recession and climate change.
"'What affects our bordering neighbors has the potential to affect us all, so we want to be certain that we have the tightest, best possible, cooperation,' Obama's national security adviser, Jim Jones, told reporters before the meeting in Guadalajara, Mexico, on Sunday and Monday."
Boston Globe's Susan Milligan, "Dream of D.C. bipartisanship shrivels"
Bloomberg News' Greg Stohr, "Sotomayor Vote Makes History Without Changing Court's Balance"
NY Times' Adam Liptak, "Sotomayor Faces Heavy Workload of Complex Cases"
LA Times' James Oliphant and David G. Savage, "Sotomayor will bring unique perspective to the Supreme Court"
CBSNews.com's Prerana Swami, "Sotomayor Confirmed in Below Average Time"
Washington Post's N.C. Aizenman, "For Latinos, Confirmation Is an Emotional Moment"
"CASH FOR CLUNKERS"
McClatchy Newspapers' David Lightman, "Senate approves $2 billion expansion for 'cash for clunkers'"
Washington Post's Dana Hedgpeth and Perry Bacon Jr., "With Senate Vote, Congress Refuels 'Clunkers' Program"
BILL CLINTON & N. KOREA
CBSNews.com, "B. Clinton 'Honored' to Go to N. Korea"
Politico's Andy Barr, "Bill Clinton mum on North Korea trip"
Associated Press' Anne Gearan, "Adviser: US has 2 more tough years in Afghanistan"
Washington Post's Mary Beth Sheridan, "Clinton Regrets U.S. Not Part of Court"
Washington Post's Annys Shin, "Tire Tariff Decision Poses First Chinese Trade Policy Test for Obama"
GITMO / TERRORISM
CBS News' Rob Hendin, "W.H. Striving to Meet Gitmo Goal, But Challenges Remain"
LA Times' Greg Miller, "Obama's counter-terrorism advisor denounces Bush-era policies"
NY Times' John M. Broder, "Climate Bill Is Threatened by Senators"
Wall Street Journal's Stephen Power, "Senate Democrats Want Climate Bill to Protect Manufacturing"
Boston Globe, "Solomont tapped as Obama's man in Madrid"
Raleigh News & Observer's Mandy Locke, "Edwards' ex-girlfriend leaves courthouse"
2009 NJ Governor: Associated Press' Angela Della Santi, "Christie outlines plan to fight corruption"
2009 NJ Governor: Courier Post's Michael Symons, "Corzine hails handgun law"
2010 TX Governor: Midland Reporter-Telegram's Dave McNeely, "Which Dems – if any – can win statewide in 2010?"
2010 FL Senate: Miami Herald's Marc Caputo, "Charlie Crist cooling on climate change"
2010 OH Senate: Columbus Dispatch's Joe Hallett, "Wealthy GOP candidate to spend millions in U.S. Senate primary"
2010 PA Senate: Wilkes-Barre Times Leader's Andrew M. Seder, "Sestak facing uphill battle against Specter"