Unemployment rate for August falls because 368,000 people stopped job search
96,000 jobs added in August, down from 141,000 jobs in July
August was a very disappointing month for job creation and new jobs. The economy added 96,000 jobs in August, down from 141,000 jobs in July, the Department of Labor reported. More people have simply stopped looking for work. While the unemployment rate fell to 8.1 percent, from 8.3 percent in July, that's largely due to the fact that 368,000 people stopped looking for work.
The majority of those who have simply given up their job search for the time being are young people. Just 63.5 percent of the working-age population was either employed or actively looking for work, which is a shameful 30-year low.
"These numbers are not very strong," Joseph LaVorgna, chief U.S. economist at Deutsche Bank says. "The job market is improving, but only gradually."
Economists say that at least 150,000 jobs need to be created each month to keep pace with the growing population.
Adding insult to injury was the fact that the number of hours people worked remained flat and wages were stagnant, LaVorgna noted.
"Clearly, it's disappointing, but it's not horrible," Scott Brown, chief economist at the investment management firm Raymond James says. "We're not losing jobs."
One bright side to the recent economic news is that employment in restaurants and bars increased by 28,000, which suggests that people may have more disposable income. Professional and technical service jobs rose by 27,000, and the health care industry added 17,000 jobs.
Manufacturing was particularly hard hit last month, which lost 15,000 jobs. The government continued to shed jobs, losing another 7,000 positions.
This comes as dire news to the committee to re-elect President Barack Obama. They had been hoping to report on stronger economic news, two months before the elections in November.
The state of the recovery remains the chief hurdle President Barack Obama needs to leap to win re-election in November.
The recent data was further evidence of a "Goldilocks economy," which is not too hot, not too cold, but not just right either, that could prompt the Federal Reserve to take new steps to boost growth.
"This weak employment report, in jobs, wages, and hours worked and participation is probably the last piece the Fed needs before launching another round of quantitative easing next week. QE will boost equities, damage the dollar and do little for the economy, but what else can an activist Fed do?" Joseph Trevisani, chief market strategist at Wordwide Markets says.
© 2012, Catholic Online. Distributed by NEWS CONSORTIUM.
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Pope Benedict XVI's Prayer Intentions for January 2013
General Intention: The Faith of Christians. That in this Year of Faith Christians may deepen their knowledge of the mystery of Christ and witness joyfully to the gift of faith in him.
Missionary Intention: Middle Eastern Christians. That the Christian communities of the Middle East, often discriminated against, may receive from the Holy Spirit the strength of fidelity and perseverance.
Keywords: Economy, job creation, August, re-election, President Obama
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