354 LINKEDINCOMMENTMORE

By Paul Davidson, USA TODAY

Employers added a disappointing 96,000 nonfarm jobs in August and the unemployment rate fell to 8.1% from July's 8.3% as the size of the workforce continued to drop, according to a Labor Department report Friday.

The highly anticipated report could shape voters' views of the economy as the presidential election draws near.

The private sector added 103,000 jobs despite a loss of 13,000 manufacturing jobs. Federal, state and local governments cut 7,000 jobs. Job gains were strongest in food services and bars, professional and technical services, and health care.

Economists' consensus forecast had expected nonfarm job gains of 127,000, including 138,000 in the private sector, and 11,000 government losses. Employment figures for June and July were revised down with a total of 41,000 fewer jobs created in those two months.

The past three months, monthly job gains have averaged 94,000 compared to 95,000 a month in the second quarter and well below the average monthly gain of 225,000 in the first quarter.

Since the start of 2012, job growth has averaged 139,000 per month compared to an average monthly gain of 153,000 last year, the Labor Department said.

The August report was disappointing in other respects. The average workweek was unchanged at 34.4 hours. Employers typically increase the hours of existing employees before hiring additional staff, which isn't happening. And average hourly earnings dipped by one cent to $23.52. .

Meanwhile, the number of temporary workers-also a sign of more permanent hiring-fell by about 5,000 for the month.

One somewhat positive development: The underemployment rate - which includes discouraged job-hunters who have stopped looking, part-time workers who prefer full-time jobs and the unemployed - dipped to 14.7% from 15%.

And the number of Americans who have been unemployed for at least six months or longer, which represents 40% of those out of work, fell 152,000 to 5 million. Their ranks thinned most likely, however, because many gave up looking for work or decided to retire early.

In July, job creation strengthened relative to recent months although some of those gains were lost in revisions that the Labor Department announced today, suggesting that the labor market may be returning to normal after a warmer-than-usual winter pulled forward economic activity to early in the year, damping growth in the spring, says Nigel Gault, chief U.S. economist of IHS Global Insight.

Federal Reserve Chairman Ben Bernanke said last week that the economy "is far from satisfactory." A still-weak housing market has begun to rebound and consumer spending has picked up. But manufacturing output has slowed substantially in recent months, and consumer confidence has fallen.

Economists have attributed the recovery's half-speed pace in part to the eurozone's recession and ongoing financial crisis, which is hampering U.S. exports. Also, many businesses are nervous about whether a divided Congress will find a way to avert the impact of large spending cuts and tax increases scheduled to kick in at year's end. Fears that Congress will remain gridlocked has prompted some firms to put off investment and hiring. And rising gasoline prices are expected to prompt consumers to curtail spending.

Friday's jobs report could be influential in Fed policymakers' discussions next week about whether the central bank should buy more Treasury or government mortgage-backed bonds in a bid to further push down long-term interest rates. Doing that could encourage more purchases of homes, cars and factory equipment. Some economists expect the Fed to take the more modest step of tentatively committing to keep short-term interest rates near zero until at least 2015. The plan now extends to at least late 2014.

354 LINKEDINCOMMENTMORE
Read or Share this story: http://www.ksdk.com/story/money/1/01/01/only-96k-jobs-added-in-august-jobless-rate-dips/3073265/