In what can only be described as a disappointing report, the Labor Department this morning said the economy created a mere 142,000 jobs in August, a number far off the 220,000 to 230,000 economists forecast. Unemployment inched down to 6.1% from 6.2%.
It was the smallest increase yet this year, and follows six months of gains over 200,000 jobs each. Going into August, the monthly average gain in new jobs was 230,000.
Temp grew by 13,000 jobs, bringing the year’s total to 124,500 new temp jobs. On average, staffing firms are adding 15,600 new jobs a month this year. That puts the industry ahead of where it was last year at this point, when the average monthly increase was 14,000 jobs.
In other sectors showing growth, the Labor Department’s report produced by the Bureau of Labor Statistics showed:
- Healthcare +34,000, with 22,800 of those jobs coming in the ambulatory services sector, especially in physicians’ offices;
- Restaurants and bars added 21,500 jobs, but cuts in other sectors of the leisure and hospitality industry created a net gain of 15,000;
- Construction showed strong growth, adding 20,000 jobs. Specialty contractors accounted for 11,500, most of those in the residential building area;
- Financial services, which includes banks, Wall Street, real estate, and insurance, a sector that suffered deep losses over the years of the recession and is only slowly improving, added 7,000 jobs.
The slight decline in the unemployment rate came from fewer working-age Americans participating in the labor force. The participation rate in August dropped back to 62.8% from 62.9%, hovering near historic lows.
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Economists say about half the decline in workers — 268,000 in August — can be attributed to Baby Boomers retiring. However, the balance comes from workers who have simply given up trying to find jobs. Luring them back to work and reducing the overall employment rate requires steady job increases over 200,000; some of the estimates put the need significantly above that threshold.
But with no change in the average workweek for all employees — 34.5 hours for the sixth consecutive month — and manufacturing overtime holding steady at 3.4 hours, a spurt in job growth isn’t likely in the immediate future.
Bloomberg News described the impact of the August report as “a pause in the recent momentum of the U.S. labor market as companies assess the prospects for demand.” The Los Angeles Times said, “The slowdown was unexpected after most recent economic data had suggested that the economy was growing at a healthy pace.” “A stumble for labor markets,” was what The Wall Street Journal said.
The silver lining most reports noted, is that the weakness of the report will keep the Federal Reserve from hastening implementation of its plan to increase interest rates. The New York Times said, “the August jobs data may take pressure off the Fed to move more quickly than expected on rates.”