Weak Growth as Employers Add 169,000 New Jobs In August And Unemployment Rate Declines
When it comes to the latest unemployment report, there's good news and there's bad news.
The good news is that the national unemployment rate has slipped to 7.3 percent — that's the lowest rate since December 2008. The labor market has also added jobs; about 169,000 in August.
Ready for the bad news? Well, when it comes to job growth, 169,000 is a pretty unimpressive number, especially considering the high unemployment rate. Economists were expecting job growth to be around 180,000 for the month.
And then there's the unemployment rate, which dropped to 7.3 percent in August, from 7.4 percent in July. It turns out that the improvement in the unemployment rate was more a factor of people giving up on looking for work than people actually finding jobs. According to the Labor Department, more than 300,000 people gave up on the job hunt in August.
During August, businesses were responsible for adding about 152,000 jobs while government work, both state and federal, accounted for around 17,000 jobs. The retail and health care sectors saw the biggest growth in employment.
Jobs numbers have been receiving intense scrutiny lately, as the Federal Reserve starts to finalize plans for tapering, or weaning off of the government's quantitative easing plan. Good job numbers mean that final plans for tapering could be discussed at the Fed's September meeting, while a less robust report means that plans may be pushed back a bit further.
But the report isn't necessarily a reason to panic — a summer slump isn't all that unusual and some signs in the report were positive. In August, the average work week increased to 34.5 hours from 34.4 hours, a sign that hiring could pick up in the near-term. The underemployment rate, which looks at several groups including part-time workers who would rather work full time, also dropped to 13.7 percent from 14 percent.