August jobless rate decreases to 6.1%

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After a sleepy start, U.S. stock markets reacted positively Friday to the sluggish August jobs report.

The national unemployment rate fell slightly last month to 6.1 percent, but non-farm payrolls added only 142,000 jobs, well short of Wall Street’s expectations.

August marked the first time since January that the number of jobs added to the economy dropped below 200,000.

Even though job creation was not as strong as expected, other recent economic data from the second quarter, including the gross domestic product and the gross economic income, might indicate the August jobs report could just be a temporary slowdown, some analysts said.

“The number was a surprise and a disappointment, but we do not believe that it indicates a slowdown in the U.S. economy,” Joseph Lake, analyst for The Economist Intelligence Unit, wrote in a note to investors.

Mr. Lake said there is a “reasonable chance” the August numbers eventually will be revised upward.

Patrick O’Keefe, director of economic research at New York City accounting and consulting firm CohnReznick, said August’s job numbers are typically revised later as government statisticians adjust for seasonal factors such as the reopening of school and the Labor Day holiday

Economists whom Reuters surveyed before the jobs report was released expected an uptick in jobs of 225,000.

According to the U.S. Bureau of Labor Statistics, the number of people working part-time because they were unable to find full-time work or had hours reduced was little changed from July to August, at about 7.3 million.

Wages last month grew 2.1 percent year-over-year and inched up 0.2 percent from July.

August’s figures show the number of long-term unemployed, those jobless for 27 weeks or more, declined by 192,000 people to 3 million. The number of “discouraged” workers in August barely changed year-over-year, with 775,000 people no longer looking for work because they believe no jobs are available for them, the BLS report said.

The report showed growth in professional and business services, which added 47,000 jobs; health care, which had an increase of 34,000 jobs; construction, which added 20,000; and the leisure and hospitality sector, which added 22,000.

Manufacturing employment was flat in August, and retail showed little change, the report found.

A strike at Market Basket, a grocery chain in the New England, put a dent in employment in the food and beverage sector, which showed an overall drop of 17,000 jobs.

“This figure is a marker of the progress that has been made but also a reminder that more must still be done to create jobs, especially for the long-term unemployed, and grow the middle class,” Jason Furman, chairman of the White House’s Council of Economic Advisors wrote on his blog. “Although the pace of job gains in August was below recent months, the broader trends are moving in the right direction.”

The Dow Jones Industrial Average closed Friday at 17,137.36, up 67.78 points, or 0.40 percent. The Standard & Poor’s 500 index was up 10.06 points or 0.50 percent, to 2,007.71; and the Nasdaq closed at 4,582.90, up 20.61 points, or 0.45 percent.

Kim Lyons: klyons@post-gazette.com or 412-263-1241. The Associated Press contributed.


First Published September 5, 2014 8:38 AM

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