Low number of jobs added, Unemployment drops to 8.1 percent

(from the New York Post) WASHINGTON – U.S. employers added 96,000 jobs last month, a weak figure that could slow the momentum President Barack Obama hoped to gain from his speech Thursday night to the Democratic National Convention.

The [August] unemployment rate fell to 8.1 percent, [down] from 8.3 percent in July. But that was only because more people gave up looking for jobs. People who are out of work are counted as unemployed only if they’re looking for a job.

The government also said Friday that 41,000 fewer jobs were created in July and June than first estimated. The economy has added just 139,000 jobs a month since the start of the year, below 2011’s average of 153,000.

Cash-short governments were a key reason the job market was weaker in June and July than first estimated. Federal, state and local governments cut 39,000 jobs in those months – above the earlier estimate of 18,000. In previous recoveries, governments have typically added jobs, not shed them.

Friday’s report was discouraging throughout. Hourly pay fell, manufacturers cut the most jobs in two years and the number of people in the work force dropped to its lowest level in 31 years. …

The report provided fodder for both presidential candidates. Soon after the report was issued, Republican nominee Mitt Romney pointed to 43 straight months in which unemployment has now exceeded 8 percent.

“President Obama just hasn’t lived up to his promises, and his policies haven’t worked,” Romney said in a statement.

At the same time, August marked the 30th straight month of private-sector job gains. Alan Krueger, the White House’s top economist, noted that 4.6 million private sector jobs have been created in that time.

Friday’s jobs report is among the most politically consequential of the campaign. It arrives as the presidential race enters the final two months before Election Day. Jobs are the core issue, and the report could sway some undecided voters.

There will be two additional employment reports before the election. But by then, more Americans will have made up their minds.

In his speech Thursday night, Obama acknowledged incomplete progress in repairing the still-struggling economy and asked voters to remain patient.

“The truth is, it will take more than a few years for us to solve challenges that have built up over the decades,” Obama said.

Aug. 21, 2012 – job seekers fill out applications at a construction job fair in New York.

Jim O’Sullivan, chief U.S. economist at High Frequency Economics, noted that hiring has improved slightly in the past two months. Job gains averaged 119,000 in July and August, up from an average monthly gain of 67,000 in the April-June quarter.

“There’s no sign of momentum fading,” he said. “That said, it’s not much better. … What you’re left with is an economy that’s still growing, but pretty modestly.”

In addition to those who’ve given up looking for work, many young Americans are avoiding the job market by remaining in school. All told, the proportion of the adult population that’s either working or looking for work fell to 63.5 percent.

That’s the lowest level in 31 years for the so-called labor force participation rate. The rate peaked at 67.3 percent in early 2000.

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No president since Franklin D. Roosevelt during the Great Depression has been re-elected with an unemployment rate over 8 percent. This year’s election will likely turn on whether voters see the economy as improving or remaining stagnant or getting worse under Obama.

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