Hiring slows in August
Sen. Pat Toomey, R-Pa., chats with Korean War veteran Robert Alper after speaking Thursday in Wilkes-Barre, in northeastern Pennsylvania. There he discussed a bill he introduced for a one-year pilot program to help veterans find jobs based on military experience. The program would provide new tools for veterans to find jobs online.
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Fewer than 10 hours after President Barack Obama accepted the Democratic nomination for a second term, the campaign for which the economy is expected to remain at center stage, the Bureau of Labor Statistics released the report on unemployment in August.
The national unemployment rate dropped from 8.3 percent in July to 8.1 percent in August, with the number of jobs rising by a lackluster 96,000.
While it was not a good report for the president, it also was not the story of an economy in free-fall that would help his Republican challenger, former Massachusetts Gov. Mitt Romney.
Stocks were up slightly on the day. The Dow Jones Industrial Average gained 14.64 points or 0.11 percent to close at 13,306.64. The Standard and Poor's 500 Index rose 0.4 percent or 5.8 points to 1,437.92 and the Nasdaq rose 0.02 percent, or 0.61 points, to 3,136.42.
The official unemployment rate did fall, but so did the overall participation rate. In August, the labor force participation rate fell from July's 63.7 percent to 63.5 percent, the lowest since 1979.
On Friday, when the bureau released the well-publicized report on employment, it also released a lesser-known table on the flows in and out of the labor force. That showed that more people (4.1 million) left their jobs and the labor force altogether, including retirees, than dropped out of the labor force because of being unemployed (2.9 million.).
It also showed that more people who got jobs in August (3.8 million) had been out of the labor force, than were unemployed and looking for work (2.3 million).
More of the newly unemployed in August came to that status from joining the labor force (2.8 million) than from losing jobs (2.1 million).
Heidi Shierholz, an economist with the Economic Policy Institute in Washington, D.C., said while the labor force participation rate has been failing, about a third of that decline is attributable to forces other than the bad economy. She said baby boomers are retiring and more young people are in college than in the past. "There's this mild, steady downward pressure on the labor force participation rate," she said.
A separate survey of employers showed the number of non-farm jobs rose by 96,000, but the bureau also downwardly revised June and July job growth to show there were 41,000 fewer jobs created than originally reported. That brings job growth to an average of 94,000 jobs a month in the past three months, less than half the rate of the average growth of 225,000 jobs in the first quarter of this year.
Alan B. Krueger, chairman of the president's Council of Economic Advisors, said the report "provides further evidence that the U.S. economy is continuing to recover from the worst downturn since the Great Depression."
Meanwhile, Mr. Romney tweeted on Friday: "If last night was the party, this morning is the hangover. 43 straight months of unemployment above 8%. America deserves better."
Manufacturing of durable goods, or items designed to last more than three years, lost 17,000 jobs in August, according to Friday's report. The heaviest losses (8,200 jobs) were seen in transportation equipment, an indication that the numbers are skewed by the auto industry, which shuts down at some point every summer so plants can be retooled to manufacture vehicles for the upcoming model year.
The National Association of Manufacturers in Washington, D.C., blamed the job losses on uncertainty about issues such as how Congress will handle the coming expiration of Bush-era tax cuts as well as spending cuts scheduled to be implemented automatically if nothing is done to avert them.
The group's CEO Jay Timmons said: "Any meaningful action on the approaching fiscal abyss has stalled, and manufacturers are feeling the effects.
"Massive tax increases and indiscriminate spending cuts threaten to undercut any minimal economic gains we have seen. This is unacceptable, and despite the excitement surrounding the recent political conventions, manufacturers are growing more pessimistic by the day about our economic future."
Job gains would have been higher if government spending remained steady, but the 103,000 jobs gained in the private sector were undercut by the decrease of 7,000 government workers.
First Published September 8, 2012 12:00 am