Friday, September 5, 2014

Job Growth Slowed in August and Unemployment Dipped to 6.1%

Total nonfarm payroll employment rose by 142,000 jobs in August, the slowest pace since last December. The disappointing report was well below expectations. August’s report included on net loss of 28,000 jobs from revisions to previous months. The poor growth breaks a six-month run where jobs growth was above 200,000 per month.

August’s weaker report may be due, in part, to statistical noise as the monthly survey has a margin of error of 90,000 jobs. Moreover, we have seen strength in other labor market metrics recently.

The unemployment rate dropped slightly to 6.1%, according to the U.S. Bureau of Labor Statistics. The labor force participation rate declined to 62.8% as 64,000 people left the labor force in August. The number of long term unemployed, defined as those who have been out of work for over 27 weeks, dropped by 192,000 people — accounting for 31% of all unemployed individuals.

The private sector, particularly the service industry, continues to drive job growth. However the weak growth across the board in the private sector lagged the overall growth for August. The service sector added 112,000 jobs in August, lower than the previous two months and August 2013. The goods producing sector also saw weak job gains, improving 22,000 in August, well below the 67,000 seen the month prior.

Government employment increased by 8,000 jobs, well above the previous three month average of 2,000.

Read the BLS report.

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