U.S. Economy Lost 54,000 Jobs in August; Unemployment Rate Rises to 9.6%

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By TOM BARKLEY and VICTORIA MCGRANE

Getty Images Job seekers in Denver waited in line for a career fair to open Sept. 2, 2010.

WASHINGTON -- Job losses continued to mount in the U.S. economy last month, though at a more modest pace than expected, putting further pressure on policy makers to take action to spur growth and employment.
Nonfarm payrolls fell by 54,000 last month, matching the level of revised losses recorded the previous month, the U.S. Labor Department said Friday. The revision in July layoffs to 54,000 followed an original estimate of a 131,000 drop in payrolls.

The U.S. economy shed jobs for a third straight month, losing 54,000 non-farm jobs, but the losses were half as bad as expected. The unemployment rate rose to 9.6%. Kelly Evans, Dennis Berman, Paul Vigna, Phil Izzo and Sudeep Reddy discuss. Also, Jerry Seib discusses what has happened to the American job creation machine.

</div>The U.S. economy has shed jobs for three straight months, though the losses in August were about half the 110,000 predicted by economists in a Dow Jones Newswires survey.
The unemployment rate, calculated using a separate household survey, edged up to 9.6%, as expected, after holding at 9.5% for previous two months.
More

• Stock Futures Jump After Jobs Data
• Capital Journal: Recovering Lost Jobs Machine
• More: Real Time Economics | MarketBeat

The report is likely to cause renewed debate during the long Labor Day weekend over what new steps the Federal Reserve and Congress should consider to jump-start the job market.
Last month, the Fed moved to stop any premature contraction in its balance sheet, effectively taking its foot off the brake pedal by reinvesting proceeds from any maturing mortgage securities into Treasurys.

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While the central bank has held off on stepping on the gas--either by resuming asset purchases or other unconventional measures--Fed officials expressed concern during the Aug. 10 meeting about the sluggish labor market and debated potential causes.
Fed Chairman Ben Bernanke declared his readiness a week ago to pursue further moves if "unexpected developments" derail the economic expansion. The "painfully slow recovery" in the jobs market was a central policy concern, he said, given the risks it poses to consumer confidence and the broader economy.
President Barack Obama, who has pushed Congress to support more job-creating measures, plans to speak Monday at the Milwaukee Laborfest. In addition to a small business bill languishing on the Hill, the administration is coming up with new ideas to promote job growth.

The report Friday showed that private sector hiring wasn't enough to offset cutbacks in job losses in the government, which continued to let go temporary workers hired for the 2010 census.
Private-sector companies added 67,000 jobs, following an upwardly revised 107,000 gain in July.
Manufacturers shed 27,000 jobs, after adding 34,000 the previous month.
Professional and business services payrolls rose 20,000. Construction, a sector of the economy that has struggled, added 19,000 jobs, as well.
Total government employment, which includes state and local jobs, fell 121,000. The declines were a result not just of the letting go of 114,000 census workers, but also job cuts by state governments facing budget pressures.
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In a positive sign, the report showed 42% of unemployed Americans were out of work for more than six months in August, down from 45% in July. It becomes harder to find a job as time goes by, as skills are lost and employers may view long periods of unemployment with suspicion.
An indication of slack in the market, and thus potential inflation pressures, moved slightly higher. Average hourly earnings of all employees increased by $0.06 to $22.66 in August. The average workweek was unchanged at 34.2 hours.

Wouldn't that sky rocket the underemployed number? They don't want that number get into the public's hands.

hahahahahahahahahahahaha ^^^^ really Playwithfire......results ftw, my god what a worthless graph that is

 

Originally Posted by rebelfd

Wouldn't that sky rocket the underemployed number? They don't want that number get into the public's hands.

only because of the way unemployment stats are presented. It's the amount of people actually collecting UEB, not everyone who'd unemployed. So by extended benefits the numbers look worse. The actual number that is never mentioned (closer to 20%) is only mentioned by those who don't want more of the same policies. Everyone else just thinks we need to spend more. Another stimulus is being worked on right now but it won't be called stimulus because... well most of us understand why and those that don't never will.

 

Originally Posted by playwithfire05

i looked at this graph and just pictured Obama in a boardroom, countinously going, "You're fired" Trump style.

 

Originally Posted by resilient

i don't know if that's accurate or not, doesn't sound right to me.... I never heard of benefits being the driver of calculations. I mean, if someone's benefits ran out, they're no longer counted as unemployed.... wut?

I do know the unemployment percentage is not a viable measure though, since it doesn't count the discouraged people who no longer seek employment. In any event, the market looks at non-farm payrolls data as the primary indicator of employment strength, rather than the unemployment rate.

I think the key is actively seeking work.

http://www.bls.gov/news.release/empsit.faq.htm

Is the count of unemployed persons limited to just those people receiving
unemployment insurance benefits?

No; the estimate of unemployment is based on a monthly sample survey of house-
holds. All persons who are without jobs and are actively seeking and available
to work are included among the unemployed. (People on temporary layoff are in-
cluded even if they do not actively seek work.) There is no requirement or question
relating to unemployment insurance benefits in the monthly survey.

Does the official unemployment rate exclude people who have stopped looking for
work?

Yes; however, there are separate estimates of persons outside the labor force who
want a job, including those who have stopped looking because they believe no jobs
are available (discouraged workers). In addition, alternative measures of labor
underutilization (discouraged workers and other groups not officially counted as
unemployed) are published each month in the Employment Situation news release.

Latest underutilization numbers.

http://www.bls.gov/lau/stalt10q2.htm

Alternative Measures of Labor Underutilization for States, Third Quarter of 2009 through Second Quarter of 2010 Averages

The six state measures are based on the same definitions as those published for the U.S.:

• U-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
• U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
• U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
• U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
• U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and
• U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.

Chart doesn't look right check link out if you want to see it.