Employment growth remained weak in August, with just 96,000 new positions created but the unemployment rate dropped to 8.1 percent, according to a report that raises the possibility of more Federal Reserve easing.
The decline in the jobless rate, from 8.3 percent in July, came primarily because the labor force participation rate fell to 63.5 percent, its worst level in more than 30 years. The civilian labor force contracted by 368,000.
…job reports for June and July were revised lower. The June count fell from 64,000 to 45,000, while July’s number came in at 141,000 from an originally reported 163,000.
Now the depressing details of the jobs report:
– 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%.
To me, this makes the Democratic convention not just bad, but infuriating. This many Americans are suffering and they put Sandra Fluke on a stage to talk about her need for free birth control? Insulting.