U.S. Job Growth Weak in August but Unemployment Indicators Improve

The August job numbers released today by the BLS will come as a disappointment, especially to Democrats who were hoping for a strong headline number during their convention week. The U.S. economy created just 96,000 new payroll jobs last month. An increase of 103,000 private-sector jobs was partly offset by a loss of 7,000 government jobs. Private-sector goods-producing jobs actually fell by 16,000. To make matters worse, the June jobs number was revised downward by 19,000 to a very weak 45,000, and the July jobs gain was revised downward by 22,000 to a more modest 141,000.

The unemployment rate decreased from 8.3 percent to 8.1 percent, but there was not as much good news in that number as it might seem. For one thing, the unemployment rate had already hit 8.1 percent once before, in April, so the August number did not break new ground. Also, much of the drop in the unemployment rate was due to a decrease in the size of the labor force. The number of employed persons, according to the household survey on which the unemployment rate is based, actually fell by 119,000 in August. The unemployment rate is based on a survey of household that is entirely separate from the establishment survey on which the payroll jobs report is based. The two surveys can produce numbers on job loss or gain that differ substantially, partly for methodological reasons and partly because the household survey, unlike the payroll survey, includes farm workers and self-employed persons. >>>Read more

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