August Job Report Shows Positive Signs
Jobs are on the rise in the private sector, though not enough to counter the massive losses of temporary government workers. The Labor Department reported on Friday that the overall American job market lost 54,000 jobs in August. Private businesses added 67,000 new jobs in the month, but the public sector limited the overall impact of the gains as 114,000 temporary census workers were laid off. It was the third month in a row in which layoffs of census workers created an overall loss in the job report.
Economists had forecast a gain in the private sector of only 44,000. It was the eighth consecutive month of job growth in the private sector following almost two years of consecutive months with losses. The report, despite the overall number, showed significant improvement in the job market, which is definitely welcome news with the recent run of bad news in reports on home sales. The job reports for June and July were also revised upwardly, adding an additional 123,000 jobs gained for those months than originally reported.
US stocks have responded favorably, posting nice gains in the pre-market report. Not counting temporary census workers, government payrolls cut 7,000 jobs as strapped state governments cut payroll. The unemployment rate rose from 9.5 percent in July to 9.6 percent in August, on par with economists’ forecasts. President Obama addressed the report by saying that the pickup in business hiring is good news, though not good enough.
“The economy is moving in a positive direction. Jobs are being created,” he said. “They’re just not being created as fast as they need to, given the big hole that we experienced,” the President said in an address. Obama also promised to unveil new proposals this week to help the economy get a stronger foothold in recovery.
The Republican House minority leader, John Boehner, used the report to attack the President’s policies, saying that the failure of those policies is evident in the poor job growth report.
The continuous high level of joblessness and slow rate of job growth have many economists in fear that the tenuous recovery could stall and plunge the nation into a double-dip recession. They say that despite bits of positive news in the job report, the job market is still extremely weak. And very few economists are currently predicting any major improvements in the labor market through the end of 2010. the languid pace of job growth, they say, is just not significant enough to make a noticeable dent in the near-record high unemployment rate. It is estimated that a job growth rate of 150,000 jobs per month is necessary just to keep up with the growth of the nation’s population.
Even if the rate of job growth picks up dramatically, it will take several years to recoup the more than 8 million jobs lost in 2008 and 2009. With 700,000 jobs added this year, we are still a staggering 7.6 million jobs behind where we were prior to the start of the worst recession since the 30s. Government layoffs are expected to hinder job growth again in September, but with only 82,000 census workers still on the payroll, the impact of census layoffs will be minimal for the last three months of 2010.