August Job Numbers Show Economy Still in a Funk
President Obama called Friday’s jobs numbers evidence that the “economy is moving in a positive direction” but that more work was needed. Find a transcript and video here.
The unemployment report for August released Friday shows that the job market remains in a deep funk — but also contains some better economic news than expected, suggesting that a double-dip recession may not be inevitable.
The unemployment rate climbed slightly to 9.6 percent and 54,000 total jobs were lost last month for the second consecutive month, much due to the loss of government jobs. But there was some good news amid that dreary data. Private payrolls increased by 67,000 jobs – that’s about 20,000 to 30,000 better than expected, depending on whose forecasts you read – and revisions to the June and July reports were also better than expected.
“I think it’s encouraging,” economist Mark Zandi of Moody’s Analytics told CNBC reporters shortly after the Labor Department issued the report.
Jobs in the private sector grew by 107,000 in July, rather than the initial estimate of 71,000, according to the revised figures.
But still, there was more bad news than good for the millions of unemployed Americans.
The federal government lost more than 100,000 workers who had been temporarily hired by the Census Department. State and local governments shrank their workforces by more than 10,000. After increasing recently, the manufacturing sector dropped 27,000 jobs.
And the so-called “underemployment” rate – those who are working part-time but want full-time work or those who have given up looking – increased slightly to 16.7 percent.
“I’d say the real unemployment rate is in the teens,” former Wisconsin Gov. Tommy Thompson said on CNBC when asked to react to the report.
It all comes amid the prospect of a midterm election that suggest the Dems will suffer heavy losses (more here from your daily dose of the Morning Line).
And it comes as President Obama and his economic team are mulling what new measures they can take to boost a weak economy. Several reports out Friday in the Washington Post, Politico and elsewhere say the president is considering a temporary break in the payroll tax, new tax credits for companies’ research and development and possibly an infrastructure program that Congress would be reluctant to approve.
We’ll have much more on all of this here on the Rundown and on Friday’s NewsHour, including a new report from Paul Solman.