No Bounce: Economy Adds Only 96,000 Jobs in August as Unemployment Drops to 8.1%
FlaglerLive | September 7, 2012
Last Updated: 9:35 a.m.
The national economy added a meager 96,000 jobs in August, and the previous two months’ total was revised downward by 41,000 jobs. Nevertheless the unemployment rate edged down to 8.1 percent, from 8.3 percent, as the employment picture continues to zigzag between hope and anemia.
Private-sector payrolls added 103,000 jobs. The overall number was lower because government again dragged down the figure with a loss of 7,000 jobs. In all, 12.5 million Americans remain out of work–and many million more when the under-employed and discouraged workers are included.
The numbers contrast sharply with Thursday’s report by ADP Payroll that the economy had added 200,000 jobs, and that July numbers had been revised upward, to 173,000. Wall Street economists had projected a gain of 125,000 jobs.The decline in the unemployment rate is not necessarily good news: it suggests that, as in Florida–where the unemployment rate has been on a downward trend–more people are leaving the work force in discouragement than joining it. The civilian labor force declined by 368,000, to 154.6 million. The participation rate has fluctuated between 154 million and 155 million since the beginning of 2008. The labor force participation rate fell to 63.5 percent, from 63.7 percent in July. It was at 66 percent four years ago.
That’s not the sort of news the Obama campaign administration was looking, coming out of the Democratic National Convention in Charlotte. The numbers will give the Romney campaign more fodder to criticize Obama’s management of the economy, and deflate the bounce Democrats were hoping to rise out of Charlotte.
More bad news: Democrats touted solid gains in manufacturing over the past two years, led by gains in the auto sector. In August, manufacturing lost 15,000 jobs, led by losses in the auto sector.
Still, there was one brighter spot: the more accurate overall unemployment rate, which includes the long-term unemployed, discouraged workers, and those employed part-time against their will, because they could not find full time work or had their hours cut back–that rate fell back by three decimal points, to 14.7 percent, down from 15 percent in July. The rate was 16.1 percent a year ago.
Also, consumer spending in August rose to a four-year high, with Americans reporting daily spending of $77, up from $73 in July. It’s still well below the $97 reported in early 2008, but a considerable improvement over the $65 to $68 rate reported for most of the past four years. And on Thursday, the Dow Jones average added 245 points, one of its biggest gains of the year, closing higher than at any point since 2008. That was driven largely by the expectation of a brighter jobs report, yet the Dow opened a few points higher Friday morning, an hour after digesting the jobs report.
Here are some highlights from the August unemployment report:
Employment in restaurants and bars increased by 28,000 in August. Employment also rose in professional and technical services (+27,000), computer systems design and related services (+11,000) and management and technical consulting services (+9,000), health care(+17,000), utilities (+9,000), and finance and insurance (+11,000). Temporary help services saw little change.
Aside from manufacturing’s losses, employment in other major industries, including mining and logging, construction, retail trade, transportation and warehousing, information, and government, showed little change over the month.
The average workweek for all employees on private payrolls was unchanged at 34.4 hours. in August. The manufacturing workweek declined by 0.2 hour to 40.5 hours. Factory overtime was unchanged at 3.2 hours. But average hourly earnings for all employees on private payrolls fell by 1 cent to $23.52. Over the past 12 months, average hourly earnings rose by 1.7 percent. The gain is more than erased by rising inflation, particularly higher energy and health costs.