Friday, September 6, 2013

Economy Added 169,000 Jobs as Unemployment Rate Dropped to 7.3%

The economy added just 169,000 jobs in August, below expectations. The unemployment rate dropped to 7.3% due to lower labor force participation. August’s report also included substantial downward revisions to previous months. July was revised from 162,000 to 104,000 and June declined from 188,000 to 172,000.

The majority of the slowing seen in August was due to weaker growth in the services industries, specifically the information and financial services sectors.

Job creation in the goods producing sector increased 18,000, following a 17,000 decline the previous month.

Although the unemployment rate dropped from 7.4% to 7.3% over the month, there was little true improvement in the labor market. Much of the improvement in the unemployment rate was a result of a rapidly deteriorating labor force participation rate which fell from 63.4% to 63.2% over the month, a post-recession low. August saw 312,000 workers leave the labor force.

The FOMC meets next week and many expect the Federal Reserve to begin tapering, but a weak jobs report like the one released today could push back the start date of the Fed’s tapering.

Read the BLS report.

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