WASHINGTON — The U.S. economy added no new jobs in
August — the worst showing in a year — as employers cut back hiring and
trimmed work hours of existing employees.
The
latest snapshot of the labor market provided stark evidence that hiring
has stalled and that the feeble economic recovery remains threatened by
the unusually deep and prolonged challenges facing American workers.
Friday’s
report from the Labor Department intensifies the pressure on President
Obama to propose a robust jobs plan when he addresses the nation next
week, and could also push the Federal Reserve to take further action on
interest-rate and other monetary policies when it meets later this
month.
The nation’s unemployment rate in August
stayed at 9.1 percent, as more people reported that they found part-time
work, many of them because that’s all that was available.
About
14 million people were officially unemployed last month. About 6
million of them, or nearly 43 percent of the unemployed, have been
without work for six months or longer. Short term, many of them face the
loss of extended jobless benefits. Longer term, they face increasing
risks of losing skills and hopes of getting re-employed.
The
report had discouraging news for current workers as well. The
government said private employers in August trimmed by a notch the
average work hours of all employees, to 34.2 hours. The average hourly
earnings for workers, meanwhile, dropped 3 cents to $23.09 last month.
In
August, total nonfarm payroll employment stood at 131.1 million. That
was the same number as July, marking the weakest change since last
September, when employers shaved a net 29,000 jobs.
The
latest tally was affected by the strike of about 45,000 Verizon workers
during the week when the Labor Department surveys employers. That will
give a lift to September’s jobs count, as those striking workers have
returned to their jobs.
Hiring in August also may
have been held back by the political turmoil over lifting the debt
ceiling, the downgrading of U.S. debt, and those events’ damaging effect
on Wall Street and public confidence. Stocks were down sharply Friday
after the jobs release, with the Dow Jones industrial average off about
200 points by mid-morning.
“The heightened market
volatility has led businesses to question the durability of the
recovery,” said Doug Duncan, chief economist at the housing finance
agency Fannie Mae. “More firms will likely stay on the fence with regard
to future hiring, increasing the chances of outright job losses in
coming months, and putting the odds of a recession in the coming year at
a coin toss.”
Even accounting for the large-scale
Verizon strike, many economists were expecting job growth of around
70,000 for August. But the report showed a stall in hiring last month in
industries almost across the board, with the exception of healthcare
services, which added 35,500 jobs.
Government cut
back a net 17,000 jobs last month, most of them teaching and other
positions at local schools. Manufacturing, which added 36,000 jobs in
July thanks largely to a rebound at car plants, shed 3,000 jobs last
month. The temporary-help industry, often seen as a harbinger of broader
hiring, added just 4,700 jobs in August, continuing a pattern of little
or no growth in recent months.
“The stagnation in
U.S. payroll employment is an ominous sign,” said Paul Ashworth, an
economist at Capital Economics. “The broad message is that even if the
U.S. economy doesn’t start to contract again, any expansion is going to
be very, very modest and fall well short of what would be needed to
drive the still-elevated unemployment rate lower.”
Making
matters worse, the government on Friday revised down job growth figures
for July, to 85,000 from 117,000 previously reported, and said
employers added just 20,000 jobs in June, not 46,000.
In
all, the economy has added an average of just 35,000 jobs a month in
the last three months — a figure so small that most analysts would
consider it a rounding error. That is a dramatic slowdown from the
nearly 180,000 net new jobs added monthly, on average, in the first four
months of this year when it looked like the nation’s hard-hit job
market might finally be recovering.
“Though much
attention is being paid to ‘zero job growth’ in August, the real news in
today’s numbers is that job growth is worse than in recent months, and
the nation continues to produce far fewer jobs than needed to
meaningfully reduce the unemployment rate,” said Heidi Shierholz, an
economist at the Economic Policy Institute. “In fact, in some ways the
report was less than zero in that weekly hours fell, as did hourly
earnings.”
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©2011
Distributed by MCT Information Services
