- The Washington Times - Friday, September 3, 2004

The nation’s employers added 144,000 jobs in August, and the unemployment rate dipped to 5.4 percent last month from 5.5 percent in July, the Labor Department reported yesterday.

Some economists had predicted the unemployment rate would hold steady in August, and said they expected employers to add 150,000 jobs to the nation’s payrolls.

“Job growth is still a little bit weaker than any of us would like to see. Businesses are hiring, but they are still doing it cautiously,” said Stuart G. Hoffman, chief economist for PNC Financial Services Group Inc., the Pittsburgh parent of PNC Bank.

Mr. Hoffman and several other economists said higher gasoline prices and health insurance costs may have tempered hiring.

Other economists said they wanted to see at least 200,000 net jobs a month on a consistent basis before declaring the labor market fully healed.

Nevertheless, August marked the biggest job gains since May and the 12th month in a row that payrolls grew.

“The economy is not growing at a rapid pace but it is a solid pace,” said Donald H. Straszheim, an independent researcher in Santa Monica, Calif., and the former chief economist for Merrill Lynch & Co.

President Bush, who accepted the Republican Party’s nomination for a second term Thursday night in New York City, and Sen. John Kerry, the Democratic presidential nominee, have clashed frequently over the economy’s health and job creation, and yesterday was no exception.

At a campaign stop in Pennsylvania, Mr. Bush said the new employment report “shows that our economy is strong and getting stronger. Our growing economy is spreading prosperity and opportunity and nothing will hold us back.”

The Kerry campaign put out a statement taking the opposite view. “Economically, after losing jobs, you’re supposed to have ever faster job growth to make up for it,” it said. “That’s not what we’re getting. We’re getting mediocre, treading-water job growth.”

Eight million people were unemployed in August, with an average duration of 19 weeks without work, up slightly from 18.6 weeks in July.

The Labor Department revised job gains for July up to 73,000, a lackluster number but more than double the 32,000 first estimated. The department had earlier revised payrolls for June to show a larger gain than first reported.

The government released its latest snapshot of the nation’s employment picture two months before the presidential election.

The president says his tax cuts have helped the economy and that making the cuts permanent will spur job creation. Mr. Kerry argues that Mr. Bush’s policies benefit the wealthy, squeeze the middle class and aren’t producing significant job growth.

The payroll figure and the unemployment rate can sometimes offering differing impressions of the labor market because they are derived from two separate statistical surveys.

The unemployment rate is calculated from a survey of around 60,000 households in which people are asked to state whether they have jobs or are looking for work. The unemployment rate in August fell as the labor force shrank by 152,000 from the previous month.

The survey used to calculate the payroll figure — seen as a better barometer of the labor market’s health by many economists — is based on information from about 160,000 businesses and government agencies, covering roughly 400,000 individual work sites.

The Labor Department said that Hurricane Charley, which struck Florida on Aug. 13 — the week both surveys were conducted — had no discernible effect on the numbers.

Federal Reserve Chairman Alan Greenspan had said that the economy hit a “soft patch” in June. However, he and his Fed colleagues expressed confidence last month that economic activity would pick up.

In August, however, retail and automobile sales came in sluggish, consumer confidence dropped and manufacturing activity grew at a slower pace.

The Federal Reserve, in a bid to keep inflation from becoming a problem, boosted short-term interest rates twice this year. That has left a key rate controlled by the Fed at 1.5 percent, still low by historical standards.

The Fed’s next meeting is Sept. 21. Economists believe the Fed will push rates by another one-quarter percentage point at that time.

“That ought to be seen as a good sign, not a bad sign,” Mr. Straszheim said.

In August, factories added 22,000 jobs, up from 6,000 the previous month — an encouraging sign for a sector that was hardest hit by the 2001 recession and has struggled mightily to get back on firm footing.

Employment at professional and business services expanded by 32,000 last month, following a gain of 47,000 in July.

Jobs in the education and health care industries grew by 45,000 in August, up from a gain of 16,000 in July.

Government jobs expanded by 24,000 in August, following a 13,000 gain.

Retailers cut 11,000 positions in August, the second straight month of jobs losses.

Employment in a category that includes transportation dipped in August as did jobs in the information services sector.

This article is based in part on wire service reports.

Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

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