Jobs gloom: Unemployment slips, but for the wrong reason

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Jobs creation last month in the United States, as reported Friday by the Bureau of Labor Statistics, was somewhere between lackluster and feeble.

The report said that 169,000 new jobs surfaced in August, down from the 180,000 that had been anticipated by some giddy optimists. The bureau also adjusted the June and July jobs figures downward, showing that 74,000 fewer jobs had been created in those months than was previously reported.

The August unemployment rate dropped a notch, from 7.4 percent to 7.3 percent, but that was due to people leaving the workforce. Labor force participation in America has dropped to 63.2 percent, the lowest rate since 1978.

It isn't surprising that government inactivity in Washington is a prominent contributor to the depressing job situation. Congress promises only a "whale of a fight" on the budget, a problem which, if unresolved by Sept. 30, could lead to a shutdown of the government. Federal agencies have been operating for much of this year under the spending limits of the sequester, leading to a drop in government jobs which was reflected in the employment report. Sharp lines are drawn between Democrats and Republicans, and between Republicans in the Senate and in the House, on raising the national debt limit, a problem that must be conquered by mid-October if the government is to pay its debts.

The Federal Reserve Board will meet later this month and will decide whether to end "quantitative easing," by which it has put $85 billion in newly printed money in the hands of America's banks every month for years. This is another shaky plank in America's economic picture that contributes to the mediocre job situation.

Finally, there is the question of going to war with Syria. The president and Congress are wrangling about that instead of seeing to the more complex problems of fixing the economy, including closing the gap between America's rich and poor.

So, it is no surprise that job creation continues to lag. Why would companies choose to enlarge their workforces while the federal government fiddles and creates uncertainty?



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