More Jobs Added Than Expected in August
And, if August was better than expected, June and July now appear to have been less bad than they previously appeared. Job loss totals were revised to 175,000 for July and 54,000 for June, down from the previously estimated 221,000 and 131,000 figures, respectively, which amounts to 123,000 fewer jobs lost than earlier reported.
The consensus of economists surveyed by Bloomberg had been that the economy would lose 90,000 jobs in August, primarily due to the loss of about 130,000 government jobs -- mostly those once-in-a-decade temporary Census jobs.
More People Are Looking for Work
The Labor Department report probably won't change the Federal Reserve's stance toward the economy. The Fed is still weighing whether to implement additional measures to stimulate an economy that's operating well below potential and that has created not nearly enough jobs for the estimated 22 million to 23 million Americans seeking full-time work. Fed Chairman Ben Bernanke has repeatedly underscored that the Fed has the tools to provide more stimulus and will act if conditions warrant it.
However, an alternate measure of unemployment, one that includes discouraged workers no longer actively seeking jobs and part-time workers who want full-time jobs, increased to 16.7% in August from 16.5% in July.
Average hourly earnings increased 6 cents to $22.66 per hour. The average workweek was unchanged at 34.2 hours. A 0.1 hour increase in the workweek generally adds about 100,000 jobs to the economy.
Job Totals By Sector
In August, the health care sector added 28,000 jobs; construction added 19,000 jobs; motor vehicle parts and dealers added 8,000 jobs; and mining added 8,000. Temporary services in the private sector -- not to be confused with temporary Census jobs -- added 17,000 jobs.
On the downside, the manufacturing sector -- which previously has been a leading job creator during the recovery -- lost 27,000 jobs. Building materials and garden-supply stores lost 6,000 jobs.
Despite the private sector additions, the overall state of the U.S. labor market is still weak. The economy isn't creating the roughly 150,000 to 200,000 jobs per month that it needs to reduce unemployment and help the recovery become self-sustaining.
High Unemployment: No Minor Matter In U.S.
Prolonged periods of job losses and/or high unemployment represent a problem for any developed economy, but they're particularly painful -- and can reach the status of a crisis -- in the U.S. That's because America's social safety net is modest and limited compared to those of eurozone states, which results in much larger economic losses for domestic unemployed and their families during periods of joblessness. If you're not a person of wealth or otherwise supported by someone else, a job isn't an option in the U.S., it's a necessity.
That's one major reason the prolonged period of inadequate job growth has led to so many negative economic outcomes and conditions in the U.S.: The American system isn't designed to have such a high percentage of its working-age population unemployed. The social supports simply don't exist to allow the nation to run normally amid high unemployment. The U.S. economy can't grow adequately while unemployment remains high and jobs short, and it certainly can't achieve the robust corporate and revenue growth results characteristic of much of the post-Cold War era.
That's why -- whether by public investment or private capital deployment, or both -- the country needs to discover ways to create lots of jobs in the quarters and years ahead. The American economic system quite simply can't do without them.