US Added Just 96,000 Jobs In August, Far Less Than Expected; Unemployment Rate Slides To 8.1%
In August, two months ahead of the presidential election ahead of which this number will be one of the most critical and talked about, the US generated just 96,000 non-farm payroll jobs, on expectations of 130K additions, and compared to the July number of 163,000, now revised to 143,000K. Private payrolls rose by a modest 103,000, much lower than the expected number of 142K, and down from July's revised 162K. -15,000 manufacturing jobs were lost, compared to the expected +10K, and sadly just a little bit short of Obama's recent promise to add 1 million manufacturing jobs by 2016. Finally, while the unemployment rate came lower (surprise, surprise: this is what appears in newspapers) at 8.1%, far lower than expectations of 8.3%, and below last month's 8.3%, the broad total underemployment rate (U-6) continues to be sticky at 14.7%. Birth Death added 87,000, up from July's 52,000. The reason for the drop in the unemployment rate: labor force participation dropped to 63.5%, down from 63.7%. Oddly enough, this report leaves the NEW QE door open, even as Obama can take the accolade for a declining unemployment rate. Win-win for everyone.
From the report:
Total nonfarm payroll employment rose by 96,000 in August. Since the beginning of this year, employment growth has averaged 139,000 per month, compared with an average monthly gain of 153,000 in 2011. In August, employment rose in food services and drinking places, in professional and technical services, and in health care.
Employment in food services and drinking places increased by 28,000 in August and by 298,000 over the past 12 months.
Employment in professional and technical services rose in August (+27,000). Job gains occurred in computer systems design and related services (+11,000) and management and technical consulting services (+9,000).
Health care employment rose by 17,000 in August. Ambulatory health care services and hospitals added 14,000 and 6,000 jobs, respectively. From June through August, job growth in health care averaged 15,000 per month, compared with an average monthly gain of 28,000 in the prior 12 months.
Utilities employment increased in August (+9,000). The increase reflects the return of utility workers who were off payrolls in July due to a labor-management dispute.
Within financial activities, finance and insurance added 11,000 jobs in August. Employment in wholesale trade continued to trend up. Employment in temporary help services changed little over the month and has shown little movement, on net, since February.
Manufacturing employment edged down in August (-15,000). A decline in motor vehicles and parts (-8,000) partially offset a gain in July. Auto manufacturers laid off fewer workers for factory retooling than usual in July, and fewer workers than usual were recalled in August.
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 nonfarm payrolls was unchanged at 34.4 hours in August. The manufacturing workweek declined by 0.2 hour to 40.5 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours. (See tables B-2 and B-7.)