Nonfarm payrolls grew by a seasonally adjusted 96,000 in August, well below estimates and down from a respectable 141,000 jobs in July.
The payrolls growth came in weaker than the 125,000 increase expected by economists surveyed by MarketWatch.
The nation’s unemployment rate fell to a seasonally adjusted 8.1%, down from 8.3% in July, according to a separate survey of households.
Economists had been expecting the jobless rate to hold steady at 8.3%.
The decline wasn’t particularly good news, however, because it reflected 368,000 people dropping out of the labor force. While unemployment dropped by 250,000 to 12.5 million for August, employment also fell, dipping 119,000 to 142.1 million.
The participation rate dropped by two-tenths of a percentage point to stand at 63.5%.
There’s no way around this the August jobs report is ugly, yes the top line number dropped to 8.1%. But that’s not because of job creation, it’s because so many working age Americans can’t find jobs they’ve simply given up and aren’t counted as part of the workforce anymore… And the sad part is it’s worse than you think, the working age population is a lot bigger today then it was in September 1981. Which is the last time labor force participation rate was a 63.5%.
And it gets worse, remember those “sunny” jobs reports in June and July? They’ve been revised sharply downward:
But job reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July’s number came in at 141,000 from an originally reported 163,000.
And manufacturing lost jobs last month:
Job creation last month was weak across the board, with manufacturing payrolls falling 15,000, the first decline since September last year. Factory jobs were inflated in July because automobile manufacturers kept plants running when they would normally shut them for retooling.
And finally average hourly and weekly earnings fell, average weekly hours for production workers was flat, and of the 96,000 jobs created last month 8,800 came from workers returning to work after a utility strike ended!
Bottom line: The August jobs report is a train wreck, it tells a tale of an economy that is staggering blindly along the edge of an abyss and in danger of falling back into recession. If nothing else this report will probably prompt the Federal Reserve into another round of easing which as Ed Morrissey notes will do little, if anything, to help the economy:
A Fed intervention won’t help the economy; the product of the previous two QE efforts dissipated rapidly, as these numbers make very clear. It will only serve to anger the public, which will rightly question why the political class hasn’t taken steps to resolve the regulatory and fiscal policies that drive stagnation. That won’t help Obama, who barely mentioned jobs at all in his speech last night.
Edit: I should add that if the labor force participation rate was at the same level it was when Barack Obama took office the unemployment rate would be 11.2%.
- Economy Adds Fewer Jobs Than Expected – Wall Street Journal
- The awful, awful August jobs report – James Pethokoukis, American Enterprise Institute
- Today’s Jobs Report: No, We Haven’t Turned the Right Corner – Jim Geraghty, National Review Online
- Record 88,921,000 Americans ‘Not in Labor Force’—119,000 Fewer Employed in August Than July – CNSNews.com