US economy adds 96K jobs; unemployment rate falls to 8.1 pct. as more people end job searches

August jobs report to get sharp focus Friday as election nears
By Michael A. Fletcher
Washington Post
Published: September 6

The number of people applying for jobless benefits fell last week, and an independent firm estimated that private employers added 201,000 jobs in August, raising hopes that the rocky job market is improving ahead of the government’s monthly unemployment report on Friday.

Economists polled by Bloomberg estimate that employers added 125,000 jobs in August and that the nation’s unemployment rate remained unchanged at 8.3 percent.

The monthly jobs number is one of the most closely watched indicators of the U.S. economy and, in an election year, can make or break how a president is perceived.

The monthly jobs number is one of the most closely watched indicators of the U.S. economy and, in an election year, can make or break how a president is perceived.

One of President Obama’s major accomplishments has been the rescue of the auto industry, but what Democrats don’t mention is the initial cost, what taxpayers are still owed and the lost jobs.

Friday’s Labor Department report is more eagerly anticipated than most. It is one of only three jobs reports remaining before the Nov. 6 presidential election. And it will come just hours after President Obama claims his party’s nomination at the Democratic National Convention, capping a meeting where Democrats have argued before the nation that the economy , while struggling, is on the right track.

Republican presidential nominee Mitt Romney has accused Obama of mishandling the economy, and the report’s headline numbers may go a long way toward shaping voters’ views about who is right.

The report also comes just days before next week’s meeting of Federal Reserve policy makers. Federal Reserve Chairman Ben S. Bernanke said last week that economic growth is far from satisfactory and vowed that unless things improve, the Fed would be “forceful” in taking action to stimulate more robust growth. A weak jobs number could provoke the Fed to further push down already low interest rates to pump up the economy.

In July, employers added 163,000 jobs, a welcome change from three consecutive months in which the nation added an average of just 73,000 jobs. That figure is far lower than what is needed to keep up with normal workforce growth and to lower the nation’s unemployment rate. Overall this year, the economy has added an average of 151,000 jobs a month.

A recent flurry of economic indicators points to a gradual improvement in the job market, many economists say.

An employment report from payroll services firm ADP showed an increase of 201,000 private-sector payroll jobs in August. Thursday’s report from ADP was the strongest in five months.

The Institute for Supply Management’s non-manufacturing employment index increased in August, even though the group’s manufacturing index declined for the third consecutive month.

Meanwhile, the Labor Department reported Thursday that weekly unemployment claims were at 365,000, down from 377,000 the previous week.

Although economists predict some improvement, they do not expect a marked change in a job market where the unemployment rate has been above 8 percent for 42 consecutive months and the average length of joblessness for those who remain in the labor force is nearly 39 weeks. The National Employment Law Project, a worker advocacy group, issued a report saying that 6 million workers have exhausted their unemployment benefits since the economic downturn took hold in 2007.

With the expiration in the coming months of federal laws extending emergency jobless benefits, two million more unemployed workers could lose their benefits by the end of the year, the group said.

“Unemployment insurance has been a vital lifeline for millions of unemployed workers, helping them meet their families¨basic needs while they search for work,¨said Christine Owens, executive director of NELP. “. . .thanks to the prolonged jobs crisis and recent cuts to unemployment insurance programs, millions are left without any jobless aid.”

U.S. Added 96,000 Jobs in August; Rate Fell to 8.1%
Sandy Huffaker/Getty Images
By NELSON D. SCHWARTZ
New York Time
September 7, 2012

The economy added 96,000 jobs in August, well below expectations and adding pressure on Federal Reserve policy makers, who have hinted they will act to stimulate the economy when they meet next week.

However, the jobless rate fell to 8.1 percent, from 8.3 percent in July, an indication that more unemployed workers were discouraged about the propsects of finding new jobs. Republicans have made persistently high unemployment a centerpiece of their argument for denying President Obama a second term, and the new figures give the White House little to boast about.

The private sector created a total of 103,000 jobs in August, while the number of government jobs fell by 7,000. In July, total non-farm payrolls grew by 141,000, revised from an earlier estimate of 163,000; the number of jobs at the local, state and federal level fell by 21,000 that month.

Economists had been expecting a gain of about 125,000 jobs in August. In order to make a significant dent in the unemployment rate, the economy would have to add at least 200,000 jobs a month, assuming modest growth in the labor force.

“We have a long way to go at this pace,” said Joel Prakken, senior managing director at Macroeconomic Advisers, describing the recent trend. “It’s moving in the right direction, but at this rate it will be years before we return to full employment with a 5 or 6 percent unemployment rate.”

Ben S. Bernanke, the chairman of the Federal Reserve, last week delivered a forceful argument for more action, calling the current unemployment level a “grave concern.”

The Federal Reserve’s Open Market Committee convenes on Wednesday and Thursday, and many economists and traders are looking for major news to come out of the meeting. Some expect the Fed to announce another round of asset purchases aimed at lowering borrowing costs and boosting investments. A more limited option would be for the Fed to extend its benchmark interest rate, set near zero, into 2015 from late 2014.

The rate of job creation has been erratic in 2012. After adding more than 200,000 jobs in both January and February, the economy slowed and by June the gain totaled an anemic 80,000 jobs. It bounced back in July, but few economists see big gains in the coming months.