The U.S. economy added 142,000 jobs in August, the worst showing of the year, as the unemployment rate fell to 6.1 percent, the Bureau of Labor Statistics reported Friday.
With Election Day two months away, the disappointing jobs figures could be a blow to President Obama and congressional Democrats, who have struggled to gain political traction from an economy that has picked up momentum but seen little in the way of wage growth.
“Today’s disappointing report, coupled with last week’s bleak economic forecast from the Congressional Budget Office, shows a pattern of weakness in the Obama economy that has too many Americans still asking, ‘where are the jobs?’" Speaker John Boehner (R-Ohio) said in a statement.
“With job growth slowing to its lowest level this year, Senate Democrats are out of excuses for stalling the dozens of House-passed jobs bills that are stuck in that chamber,” he added. Democrats have been holding out hope all summer for an election-year boost from the economy, which has roared to life after years of tepid growth in the aftermath of the financial crash.
But with poll numbers showing most Americans are pessimistic about their own financial prospects — largely due to stagnant wages — it appears unlikely that the economy will help Democrats as they fight to save their Senate majority.
Many Democratic incumbents in tough reelection fights have taken the stance that more must be done to generate faster growth.
The White House put a positive spin on the new employment figures.
Jason Furman, chairman of the White House Council of Economic Advisers, said, although job gains slowed, “the broader trends are moving in the right direction.”
“To continue to support the progress our economy has made, the president will act wherever he can to create good jobs, facilitate investments in American infrastructure and manufacturing, and make sure that hard work pays off with higher wages,” Furman said.
“To continue to support the progress our economy has made, the president will act wherever he can to create good jobs, facilitate investments in American infrastructure and manufacturing, and make sure that hard work pays off with higher wages,” Furman said.
Employers had added an average of 230,000 jobs each month this year, up until August. Last month's numbers are the worst since the government reported 84,000 jobs were added in December.
Overall, there were 28,000 fewer job gains in the previous two months. June’s figure was revised down 31,000 to 267,000, while July was revised upwards 212,000 jobs, 3,000 more jobs than initially reported.
Economists offered a variety of explanations for the weak growth.
Overall, there were 28,000 fewer job gains in the previous two months. June’s figure was revised down 31,000 to 267,000, while July was revised upwards 212,000 jobs, 3,000 more jobs than initially reported.
Economists offered a variety of explanations for the weak growth.
Mark Zandi, chief economist at Moody’s Analytics, said that, while the numbers were a disappointment, they are an “aberration and not a sign the economy is faltering.”
A number of special factors depressed the August figures, he said, including a grocery store strike that cost 17,000 jobs and a change in the timing for auto plants to retool that cost another 15,000 jobs.
He expects the figures to be revised to look more positive.
“Job growth will rebound next month back to over 200,000,” Zandi said in an email to The Hill.
A number of special factors depressed the August figures, he said, including a grocery store strike that cost 17,000 jobs and a change in the timing for auto plants to retool that cost another 15,000 jobs.
He expects the figures to be revised to look more positive.
“Job growth will rebound next month back to over 200,000,” Zandi said in an email to The Hill.
A separate ADP report on Thursday showed that the private sector added 204,000 jobs last month, a sign of consistent growth.
Meanwhile, the service sector expanded in August at its fastest pace on record and earlier this week, the Institute for Supply Management's manufacturing gauge showed that the sector grew at its fastest pace since 2011.
Meanwhile, the service sector expanded in August at its fastest pace on record and earlier this week, the Institute for Supply Management's manufacturing gauge showed that the sector grew at its fastest pace since 2011.
Automakers let go of fewer workers in July, adding 12,800, but they also brought back fewer workers than normal in August, as the sector shed 4,600 jobs.
Retailers shed 8,400 jobs, after gaining 21,000 in July.
“The weaker job growth presents a mixed picture of the economy compared to other indicators implying the economy is growing,” said Jack Kleinhenz, chief economist at the National Retail Federation (NRF).
“Today's report calls into question how much momentum the U.S. economy will show in the second half of the year.”
A lack of wage growth has hampered the recovery, with consumers preferring to ramp up their savings instead of accelerating their spending.
“On a positive note, average hourly earnings picked up, but it still remains modest at 2.1 percent on a year-over-year basis," Kleinhenz said.
Dan Alpert, managing partner of investment bank Westwood Capital, tweeted, “this data tells me that employers got a little ahead of themselves earlier in the year and that end sales now need to track higher.”
Justin Wolfers, senior fellow at the Peterson Institute for International Economics and professor at the University of Michigan, said, “at this point, I suspect the real puzzle remains why wage growth is so weak, not why it may be very very mildly rising.”
He said wages should be growing at a 3 percent to 4 percent clip.
Despite the jobs pause, the Federal Reserve is unlikely to change plans from winding down its monetary stimulus this fall and raising interest rates next summer.
Fed Chairwoman Janet Yellen has expressed concern about the labor market’s slack and has said the central bank would proceed cautiously to examine better the health of the nation's economy.
Retailers shed 8,400 jobs, after gaining 21,000 in July.
“The weaker job growth presents a mixed picture of the economy compared to other indicators implying the economy is growing,” said Jack Kleinhenz, chief economist at the National Retail Federation (NRF).
“Today's report calls into question how much momentum the U.S. economy will show in the second half of the year.”
A lack of wage growth has hampered the recovery, with consumers preferring to ramp up their savings instead of accelerating their spending.
“On a positive note, average hourly earnings picked up, but it still remains modest at 2.1 percent on a year-over-year basis," Kleinhenz said.
Dan Alpert, managing partner of investment bank Westwood Capital, tweeted, “this data tells me that employers got a little ahead of themselves earlier in the year and that end sales now need to track higher.”
Justin Wolfers, senior fellow at the Peterson Institute for International Economics and professor at the University of Michigan, said, “at this point, I suspect the real puzzle remains why wage growth is so weak, not why it may be very very mildly rising.”
He said wages should be growing at a 3 percent to 4 percent clip.
Despite the jobs pause, the Federal Reserve is unlikely to change plans from winding down its monetary stimulus this fall and raising interest rates next summer.
Fed Chairwoman Janet Yellen has expressed concern about the labor market’s slack and has said the central bank would proceed cautiously to examine better the health of the nation's economy.
https://thehill.com/policy/finance/216752-economy-adds-142k-jobs-worst-since-december
http://freebeacon.com/issues/sessions-in-august-twice-as-many-people-left-the-labor-force-as-found-jobs/
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