Unemployment rate unchanged at 9.1% on flat jobs report
Non-farm payrolls were unchanged in August as the U.S. economy failed to add jobs for the first time in 11 months, according to the Labor Department. The stagnant performance in was down sharply from a revised 85,000 gain in July jobs, and below economist’s consensus August forecasts of 60,000 new jobs. The unemployment rate also remained unchanged at 9.1%.
The debt ceiling debate, the country’s loss of its triple-A credit rating, stock market volatility and concerns about Europe’s sovereign debt all contributed to the poor employment picture, economists said.
In response to the news, the Dow Jones Industrial average lost more than 2% at the opening of Friday's trading.
“This is further evidence that the economy is very close to stalling if not having stalled,” said Nariman Behravesh, chief economist at HIS in Lexington, Massachusetts, who had forecast a gain of 15,000 jobs.
Overall payroll estimates of 86 economists surveyed by Bloomberg ranged from a decline of 20,000 jobs to an increase of 160,000.
Government payrolls lost 17,000 jobs in August, while private hiring climbed by 17,000, the smallest increase since a decline in February 2010. August factory payrolls fell by 3,000 after a gain of 36,000 in July.
August service providers increased 3,000 and construction employment fell 5,000 for the month. The lone bright spot was the health sector, which added 29,700 jobs.
A strike of 45,000 Verizon workers impacted information industry employment. They began returning to work on August 22 and will be counted as employed in next months report.
The so-called underemployment rate—which includes part time workers seeking full-time work and people who have given up looking for work—edged up to 16.2% from 16.1%.
Average hourly earnings fell 0.1% to $23.09, today’s report showed.
“Economic growth has, for the most part, been at rates insufficient to achieve sustained reductions in unemployment,” Federal Reserve chief Ben Bernanke said last week at the Jackson Hole, Wyoming bank symposium. “It is clear that the recovery from the crisis as been much less robust than we had hoped.”
Job growth at halt in U.S; worse showing in 11 months (http://www.nytimes.com/2011/09/03/business/economy/united-states-showed-no-job-growth-in-august.html). New York Times, September 3, 2011
Employment in U.S. stagnated in August (http://www.bloomberg.com/news/2011-09-02/employment-in-u-s-unexpectedly-stagnated-in-august-jobless-rate-at-9-1-.html). Bloomberg, September 2, 2011