August Employment Numbers Suggest Slow Down in Economic Recovery
The Bureau of Labor Statistics frumped up President Barack Obama’s convention glow Friday when it released disappointing employment figures for August.
According to a BLS release, total nonfarm payroll employment rose by 96,000, enough to lower the unemployment rate to 8.1%, but the gain was off pace from the year’s monthly average of $139,000 new jobs. In 2011, the average monthly job gain was 153,000.
The BLS also revised June and July’s employment figures downward, erasing 41,000 jobs that were previously reported as gains.
“On the surface, the decline in the nation’s unemployment rate over the past year appears encouraging. However, the underlying data tells a different story,” said Brian Turner, director and chief strategist of Catalyst Strategic Solutions in Plano, Texas.
While the U.S. population has increased by 3.7 million over the past 12 months, the labor force has only increased by 971,000, Turner said, because nearly 2.7 million workers were removed from the labor force. At the same time, the number of employed has increased by 2.3 million since August 2011. The combination of those factors has resulted in a lower labor force participation rate despite the reduction of the unemployment rate from 9.1% to 8.1%.
Employment rose in food services and drinking places, professional and technical services, and health care. According to BLS data, the financial services sector, which includes lending institutions, mortgage brokers, clearinghouse and reserve services, check cashers and payday lenders, experienced a 3.7% employment gain in August.
However, depository credit providers saw a 1.1% employment decline, with the commercial banking subset taking a 1.6% hit.
The long-term unemployed, who have been jobless for 27 weeks or more, held steady at 5 million. These individuals accounted for 40% of the total unemployed.
The overall size of civilian labor force – 154.6 million – declined in August, as did the labor force participation rate of 63.5%. The 8 million involuntary part-time workers remained the same.
There were 844,000 discouraged workers in August, a decline of 133,000 from a year earlier. Average hourly earnings decreased by 1 cent to $23.52. September’s employment statistics are scheduled to be released Friday, Oct. 5.