The August jobs report released by the Bureau of Labor Statistics Fridays said the U.S. economy added just 142,000 jobs in August, far below economists’ expectations of 225,000 new jobs. Though economists were optimistic after a run of job creation over 200,000, the disappointing data continues a 5-year trend under the Obama administration of fizzling labor market conditions after bursts of what appears to be improvement.
Nearly all major sectors including manufacturing, retail and transportation clocked in weak job creation.
While the unemployment rate fell by 0.01 percentage point to 6.1 percent, slightly down from the 6.2 percent level a month ago, the number of unemployment persons remained at 9.6 million. These individuals accounted for 31.2 percent of the total number of unemployed persons in America.
In August, the employment-population ratio held at an abysmal 59.0 percent, where it has sat for the third consecutive month. The civilian labor force participation rate still stands at 62.8 percent, and the number of persons employed part time for economic reasons, otherwise referred to as involuntary part-time workers, remains a large driver of job creation. That number in August was a whopping 7.3 million persons.
“The report is a remarkable disappointment as a headline number, especially after receiving such promising macro data over the summer,” said Todd M. Schoenberger, President, J. Streicher Asset Management in New York.
Low-paying leisure and hospitality, employment in food services and drinking places also continued to over-represent the number of jobs created, weakening opportunities for the middle class. A whole 22,000 jobs were created in this sector marking 289,000 over the year. No wonder political forces are relentless in pushing a “living wage” or increase in the minimum wage. Unfortunately, more than half of minimum wage increases go to members of non-low-income households.
“Employment in other major industries, including mining and logging, wholesale trade, transportation and warehousing, information, financial activities, and government, showed little change over the month,” the Labor Department said in a statement.
Motor vehicles and parts, higher-paying job sectors, were particularly discouraging in August, losing 5,000 jobs after adding 13,000 in July. In August, the average workweek for all employees on private nonfarm payrolls was just 34.5 hours, which is what is has remained for the sixth consecutive month.
The average workweek and wage data explains why the American people are deeply pessimistic about the U.S. economy even though the president’s proponents keep touting this year’s improvements. Average hourly earnings rose by just 2.1 percent, far below analysts’ predictions, while average hourly earnings for all employees on private nonfarm payrolls rose by just 6 cents in August to $24.53.
