JUDY WOODRUFF: And we turn to today’s report on jobs and unemployment in the U.S., one that’s raising concerns again about sluggish hiring and the pace of economic growth.
The NewsHour’s economics correspondent, Paul Solman, has the story, part of his ongoing coverage of Making Sense of financial news.
PAUL SOLMAN: Today’s headline numbers, employers added 169,000 new jobs last month. The official unemployment rate slid from 7.4 percent to 7.3 percent. But what to make of the numbers?
We enlisted NewsHour regular Lisa Lynch, a former Labor Department chief economist, now at Brandeis University.
LISA LYNCH, Brandeis University: In today’s report, we have a little bit of something for everyone. We saw the unemployment rate drop. Jobs were added to the economy. That’s good news. But when we go deeper into the numbers, we see a more mixed picture.
PAUL SOLMAN: While the quantity of jobs added looked OK — though lower than average gain over the past year — Lynch questioned their quality, because, continuing a trend throughout the recovery, most of the added jobs were low-paying.
LISA LYNCH: We saw a lot of jobs added in the retail sector in stores. That’s good news. Consumers are shopping. But those jobs tend to be lower-wage jobs. And we saw jobs added in restaurants and hotels. Again, that means people are spending money. They’re going out. But those jobs themselves are not high-paying jobs.
PAUL SOLMAN: By contrast, well-paying finance and information jobs shrank — also vexing, a sharp 74,000 downward revision in jobs already counted as having been added earlier this summer.
LISA LYNCH: In fact, the newly revised figure for July says that we only add a little more than 100,000 jobs to the economy. Now, if we were told in July when the report was first released that we had only added 100,000 jobs to the economy, people would have put their arms up in the air and said, oh, my goodness, we’re going into a recession. There would have been a lot of doom and gloom. So those downward revisions give one pause.
PAUL SOLMAN: And there may be another cause for pause, says Lynch, a drop in the percentage of Americans who are either working or looking for work.
LISA LYNCH: We’re down to a labor force participation rate that we haven’t seen since 1978.
PAUL SOLMAN: But isn’t the drop the result of the baby boomers finally retiring?
LISA LYNCH: I think we saw in today’s report some of that. But we’re also seeing young people either not going into the labor market or delaying entry into the labor market. So you’re seeing it at that end. And then you are seeing the impact of an aging population. While more older people are working than in the past, they still have much lower participation rates.
PAUL SOLMAN: Meanwhile, markets will be digesting the numbers in advance of the Federal Reserve, whose Open Market Committee will meet later this month to decide whether or not to pare back the Fed’s $85 billion-a-month bond-buying stimulus program, which depends on how well the economy is doing, which depends in turn on how to interpret today’s unemployment numbers.