Unemployment climbs to 9.7 percent in August
The increase in the unemployment rate to 9.7 percent was higher than analyst expectations at 9.5 percent. In July, the rate fell unexpectedly to 9.4 percent from 9.5 percent in June. In August, the number of Americans looking for work jumped by 466,000 to 14.9 million, the government said Friday.
The number of non-farm jobs cut, at 216,000, was fewer than the 225,000 analysts had anticipated. Still, many employers remain reluctant to hire until an economic turnaround is plainly underway.
"The labor market's healing process is agonizingly slow," analyst Joshua Shapiro told Bloomberg News ahead of the report's release. "We expect the improvement to remain a very slow one, and therefore for the household sector to be contending with a weak labor market for some time," said Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York.
The number of unemployed workers has risen 7.4 million and the unemployment rate has grown by 4.8 percentage points since December 2007, when the recession began. More than 6 million jobs have been lost.
Friday's sobering jobs report contrasts with positive economic news released earlier in the week. A report Thursday by the Institute for Supply Management showed the manufacturing sector grew last month for the first time in 19 months. A separate report by the trade group showed its service sector index rose to its highest level in nearly a year.
Also, minutes released from last month's meeting of Federal Reserve policymakers showed increased optimism about the nation heading toward economic recovery. Among factors the Fed cited for optimism were reports showing that the pace of job cuts had slowed "noticeably in recent months," and increased activity in motor vehicle production and the housing market.
Job-market news remained mixed, however. Data released Thursday showed the number of workers filing for initial unemployment benefits for the first time fell last week by 4,000 to 570,000. But a more important measure, showing the average number of claims during a four-week period, rose by 4,000 to 571,250.
Thursday's initial claims report also showed the number of Americans who continue to receive benefits rose 92,000 to 6.23 million in the week ending Aug. 22. California, Ohio, New Hampshire, Wisconsin and Minnesota showed the largest increases in initial claims.
Following the release of Friday's job report at 8:30 a.m. ET, stock futures remained higher. The Dow was up 11 points to 9,341, the Standard & Poor's 500 index was up 1.80 at 1,003.50, and the Nasdaq composite index was higher by 3.25 to 1,607.25.
Trading on Wall Street is expected to be volatile Friday. With many traders headed out for the long holiday weekend, volume can be expected to be light and that can skew market movement's.