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Unemployment falls to 8.1 percent; jobs up 96K; 368K drop out of market
The unemployment rate last month fell to 8.1 percent from 8.3 percent as 96,000 more people found jobs and 368,000 dropped out of the labor market, the Labor Department reported Friday morning.
Continuing a trend this year that offers both good news and bad news for President Obama and unemployed workers, businesses continued to mete out a modicum of new jobs, but at a pace averaging around 139,000 a month, which falls short of what is needed to put a large backlog of workers idled by the recession back on the job.
“The good news was that the rate of unemployment fell from 8.3 percent to 8.1 percent, but that improvement will be largely overshadowed by the disappointing hiring trend,” said Chris Williamson, chief economist at Markit. “The pace of economic growth remains insufficient to make meaningful inroads into unemployment in coming months.”
While some economists said the drop in joblessness augurs well for the president’s re-election, Republicans immediately seized on the report as evidence that Mr. Obama’s economic program has failed to spark stronger growth.
“The American people are still asking, ‘where are the jobs?’ ” said House Speaker John Boehner, Ohio Republican.
The job gains in August, while tepid, spanned a wide range of industries from health care and restaurants to utilities and computer system design. Most of the positions were permanent; employment in temporary jobs has slowed to a trickle this year.
Despite the slow but steady flow of new jobs onto the market, many job-seekers appeared to get discouraged during the month and dropped out of the labor force. Of the 368,000 who stopped looking for work, likely many returned to school for the beginning of the fall semester. The department also reported that there were 41,000 fewer new jobs available in June and July than it previously estimated.
Government continued to shed workers, laying off another 7,000 during August, leading to the smallest government workforce since 2006. Growth of more than 100,000 in private employment, however, brought the level of workers in that sector to its highest since December 2008.
For the 142.1 million people who already have jobs, the news on wages was dismal. The department said average hourly earnings actually dropped by a cent to $23.52, and over the past year wages have grown only by 1.7 percent — close to a record low.
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