It’s not the sort of encouraging back-to-school numbers the economy can be proud of: the economy created just 142,000 jobs in August, the Labor Department reported this morning, the lowest total since January, when 129,000 jobs were created. The unemployment rate dropped by just a decimal point, to 6.1 percent.
The unemployment rate has been stuck in the 6 percent range for the last nine months. August’s tepid numbers end a streak of six straight months when job creation was better than 200,000 a month, and in one case exceeded 300,000. The unemployment rate cannot steadily fall unless the economy creates 200,000 jobs or more every month. It needs to create 150,000 jobs a month just to absorb the natural growth in entrants to the job market.
The number of long-term unemployed (those jobless for 27 weeks or more) declined by 192,000 to 3 million in August, adding to a decline of 1.3 million over the past year, though they still represent a third of the unemployed. And the number of people employed part-time because they couldn’t find full-time work, or because their hours were cut back, is still at a very high 7.3 million. When that number is added to that reflecting people who have dropped out of the workforce entirely, the unemployment and underemployment rate is actually 12 percent, according to the Bureau of Labor Statistics.
The labor-market participation rate is also near historic lows, at 62.8 percent, driven to that point in part by the retirement of baby boomers, but also because millions have given up looking for work altogether.
On the other hand, the Wall Street Journal notes that “employers outside the government have added jobs for 54 straight months–the longest such streak on records back to 1939.” And the disconnect persists between weaker-than-desired job creation and strong corporate profits. “U.S. firms have been able to, on average, squeeze more profit and revenue out of their employees,” the Journal quotes Brian Hamilton, the chairman of research firm Sageworks, as writing this morning, just before the unemployment report came out. “If companies continue to see that they can increase revenues and profits efficiently using their current work force, the incentive to hire may be less evident, as each new hire represents an additional overhead cost.”
A few highlights from the September report: The unemployment rate for adult men and adult women was 5.7 percent. Unemployment for teenagers was 19.6 percent. For 5.3 percent for whites, 11.4 percent for blacks, 7.5 percent for Hispanics and 4.5 percent for Asians.
In major industries, professional and business services added 47,000 jobs in August, health care jobs increased by 34,000 boosted by gains in physicians’ offices and hospitals. Tourism employment increased by 22,000. Construction added 20,000 jobs. Manufacturing was unchanged as auto manufacturers laid off fewer workers than usual for factory retooling in July, and fewer workers than usual were recalled in August. Retail lost 8,000 jobs, food and beverage stores lost 17,000 jobs, though that number reflects employment disruptions at a grocery store chain in New England. Mining and logging, wholesale trade, transportation and warehousing, information, financial activities, and government, showed little change over the month.
The average workweek for all employees on private payrolls was 34.5 hours for the sixth consecutive month. The manufacturing workweek edged up by
0.1 hour to 41.0 hours, and overtime was unchanged at 3.4 hours. Average hourly earnings rose by 6 cents in August to $24.53. Over the year, average hourly earnings have risen by 2.1 percent, not enough to overcome inflation and net workers the sort of improvements that translate into standard of living increases.