The awful, awful August jobs report by James Pethokoukis

Nonfarm payrolls increased by only 96,000 in August, the Labor Department said, versus expectations of 125,000 jobs or more. The manufacturing sector, much touted by the president in his convention speech, lost 15,000 jobs.

– Since the start of the year, job growth has averaged 139,000 per month vs. an average monthly gain of 153,000 in 2011.
– As the chart at the top shows, the unemployment rate remains far above the rate predicted by Team Obama if Congress passed the stimulus. (This is the Romer-Bernstein chart.)
– While the unemployment rate dropped to 8.1% from 8.3% in July, it was due to a big drop in the labor force participation rate (the share of Americans with a job or looking for one). If fewer Americans hadn’t given up looking for work, the unemployment rate would have risen.
– Reuters notes that the participation rate is now at its lowest level since September 1981.
– If the labor force participation rate was the same as when Obama took office in January 2009, the unemployment rate would be 11.2%.
– If the participation rate had just stayed the same as last month, the unemployment rate would be 8.4%.

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Oh my, JPMorgan economist just absolutely destroys the August jobs report

Labor market activity was disappointing again in Aug … The more comprehensive employment-to-population ratio ticked down to 58.3%; this measure is a mere 0.1% above its cycle trough, indicating that once one takes account of population growth there has been essentially no progress in repairing the labor market after the recent downturn. In fact, if you go through the details it’s hard to find any redeeming aspects to this jobs report. In terms of the broader economy, today’s numbers should check any enthusiasm that the economy was gaining momentum toward the end of the summer. Instead, the economy appears to remain stuck in the mud. The weak pace of labor income growth will likely limit the pace of consumer spending, which in turn means continued unsatisfactory GDP growth. Today’s number increases our conviction in our existing Fed call which looks for the FOMC to engage in further asset purchases and to push back rate guidance at next week’s meeting.

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