The government reported employers, the ninth straight month of job losses. The crowd gathered to hear Obama at a Pennsylvania high school football field booed when he told them the numbers and again when he told them McCain recently said the economy is fundamentally strong and has made great progress under President Bush.
The Illinois senator encouraged voters to change the Republican leadership in the White House that he said hasn't worked. He disputed McCain running mateclaim in a debate Thursday night that own spending plan would be a job killer.
"When Sen. McCain and his running mate talk about job killing, that's something they know a thing or two about," Obama said. "Because the policies they've supported and are supporting are killing jobs in America every single day."
Hours later at a town hall meeting in Pueblo, Colo., McCain himself said Obama's plans would hurt the economy.
"He wants higher taxes, more government, higher spending, and frankly that record is not something which has been good for America and we won't let it happen," McCain said.
Obama is proposing tax increases only for those earning more than $250,000 but would cut taxes for those making less - details that McCain and Palin don't mention.
Their dispute came as Congress. Both campaigns said their candidates called lawmakers on behalf of the bill. Members of the Congressional Black Caucus credited Obama with changing their minds, including Rep. John Lewis, D-Ga., and Reps. Elijah Cummings and Donna Edwards, both Maryland Democrats.
McCain spokesman Tucker Bounds said, "He's made a number of calls today. We are not releasing specifics at this time." But Republican Rep. Sue Myrick of North Carolina, who switched her vote to favor the measure, said she hadn't heard from McCain. "They told me he was going to call me. He didn't," she said.
Speaking to reporters upon landing in Flagstaff, Ariz., McCain took credit for helping push the bailout through Congress. Last week he briefly rearranged his campaign schedule to go to Washington as lawmakers began considering the package. He left to debate Obama but returned last weekend before the first House vote.
"I'm glad I suspended my campaign and went back to Washington to bring, to help bring House Republicans to the table," McCain said.
Despite Congress' passage of the bailout, there was no indication the Wall Street crisis would give way to other campaign issues and more economic woes could be ahead.
Speaking in battleground Colorado, McCain defended the bailout, which he voted for in the Senate on Wednesday.
The Arizona senator said he is a "proud opponent of waste and pork barrel spending," possibly a reference to pet projects and sweeteners tucked into the rescue measure to win more votes after the House defeated it Monday with 133 Republicans and 95 Democrats voting no.
"But I also have to tell you that the government has to step in at this time and save Main Street from the challenges and the disaster that's looming," he said.
Later, a member of the town hall audience asked why the government is bailing out Wall Street first instead of helping individual homeowners.
"I know that a lot of people view this as a 'bailout for Wall Street.' I'm not interested in helping Wall Street in any way," McCain said. He said rescuing the financial industry will give Americans confidence in the economy and help stabilize the housing market, which would eventually benefit homeowners.
With that grim economic backdrop, Obama is seeking to solidify his lead in national and battleground polls, while McCain looks for a game-changing development to close a gap that grew in part because McCain struggled to respond to the financial crisis and because economic woes tend to push voters toward Democratic candidates.
Polls show Obama has made progress in persuading voters that he's ready to be president and that McCain would continue Bush's economic policies. But the Illinois senator still has work to do to lock down his lead in case outside events or campaign blunders change the campaign conversation.
Obama planned to continue to use the economy and McCain's 90 percent support for Bush in the Senate to hammer his opponent and to argue that the GOP ticket has failed to articulate how it would be different from the current administration. Aides still view the race as very close.
McCain's campaign is trying to regroup from a disastrous two weeks. As Wall Street crumbled, McCain struggled to strike the right note. Palin's qualifications came under fire from GOP critics after she appeared ill-informed in TV interviews. The GOP nominee's poll numbers slipped everywhere, dropping so far in Michigan that the campaign pulled the plug. It diverted resources elsewhere, even moving to shore up Republican bastions like Indiana and North Carolina.
The Arizona senator's advisers argued that Palin's debate performance quieted GOP critics and reassured other skeptics enough to stop McCain's slide, but it was too early to verify that. McCain advisers also hope Congress' approval of the bailout will help turn the page to other issues. They say McCain will go hard after Obama by emphasizing liberal positions Obama has taken in Senate votes.
In other campaign news, Sen. Joe Biden bid safe farewell to a Delaware National Guard unit that includes his son Beau, reports CBS Evening News anchor Katie Couric. The Guard troops will soon be deployed to Iraq.
Meanwhile, Gov. Palin and her husband Todd released their income tax returns for the last two years. In 2006, they earned about $128,000. That figure jumped to $166,000 in 2007 as Palin was elected governor. Alaska's first family paid nearly $37,000 in federal taxes over those two years and gave about $8,000 to charity.