The nation?s pace of job creation unexpectedly slowed in August, according to government figures released Friday, raising expectations that the Federal Reserve will inject the flagging economy with its biggest stimulus initiative in two years.
Employers added just 96,000 jobs last month. And despite sitting on a pile of cash, companies said they continue to hold back on hiring in the face of fragile business conditions, slowing growth around the world and uncertain national policies.
A detailed look at the job situation in August
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The tepid jobs recovery has spanned virtually every sector of the labor market over the past year. Manufacturing, once a bright spot, hit a bump in August and shed jobs. Construction hiring remained mired in a slump, while cash-starved state and local governments continued to slash payrolls. Just about the only sectors that added jobs were financial services and the health industry, but those gains were not enough to lift the job market from the deep hole caused by the recession.
The weak job figures posed a post-convention setback for President Obama, who argued that he is slowly getting the economy on track but needs more time. The campaign of Republican challenger Mitt Romney said the report confirms the administration?s ineffectiveness on the economy.
This year, employers have added an average of 139,000 jobs a month, below last year?s monthly average of 153,000, and just over the number needed to meet the normal expansion of the labor force.
But few things are normal in this recovery. The unemployment rate declined in August to 8.1 percent, a drop that occurred largely because 368,000 people left the labor force. The Labor Department counts only those actively seeking a job as unemployed.
The percentage of people older than 16 in the workforce reached its lowest level since 1981, according to the Labor Department. Nearly 70 percent of men were working or looking for a job ? the lowest percentage since the government began tracking the statistic in 1948.
Economists attribute the workforce decline, which accelerated with the country?s economic problems, both to an aging population and the despair engendered by an unemployment rate that has hovered above 8 percent for 43 consecutive months.
The bleak report is all but certain to spur the Federal Reserve to expand its efforts to generate faster economic growth and lower unemployment. The central bank, whose policymakers meet next week, is strongly considering pumping hundreds of billions of dollars into the mortgage market.
The Fed is likely to extend its plan to hold interest rates near zero for up to a year ? moving its guidance from 2014 to 2015, as investor expectations soar about what the U.S. central bank will do to speed up the nation?s sluggish economic recovery.
The central bank, which has not yet made any decisions, will announce what actions it is taking on Thursday after the conclusion of a two-day policymaking meeting.
The Fed signaled last month that it was nearing new action ? absent a sudden positive turn in the economy ? and Fed Chairman Ben S. Bernanke increased expectations further last week when he identified mass unemployment as a ?grave concern? that the central bank must forcefully address.
Source: http://feeds.washingtonpost.com/click.phdo?i=24c15cad7aa54c3bb2e2eaca6866f400
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