The US added 142,000 jobs in August, the Labor Department announced on Friday, the lowest figure this year and one that ends a streak of months in which the economy added over 200,000 new positions.
The news came as a surprise. Analysts polled by Reuters had expected a gain of about 225,000. They correctly anticipated that the unemployment rate would fall to 6.1%, down from 6.2% and close to a six-year low. The US had added an average of 212,000 jobs each month over the prior 12 months.
August’s growth also did little to impact those worst hit by the recession. The unemployment rate for African Americans remained unchanged at 11.4%, more than twice the rate for white people, and Hispanic unemployment stayed flat at 7.5%. Teenage unemployment remained at 19.6%.
The labour-force participation rate – which measures the percentage of the US population who are either working or looking for work – fell to 62.8% in August from July’s 62.9%. The August rate matches the lowest level since the late 1970s and suggests many people may have given up looking for work. The dip is the likely explanation for the marginal fall in the unemployment rate.
The news was all the more surprising following a report on Thursday from ADP, the US’s largest payroll firm. According to its monthly tally of private sector hirings the US added 204,000 jobs in August, the fifth straight month of employment gains above 200,000.
While the monthly number was disappointing, the longer-term trend remains positive. Gains now average 207,000 over the last three months. July’s gain was revised up slightly to 212,000 from an earlier estimate of 209,000, though June’s gain was revised down to 267,000 from an earlier estimate of 298,000.
Republicans pounced on the report, with House speaker John Boehner pointing to a congressional budget office report released last week that said economy will grow more slowly this year than it did in 2013.
“Today’s disappointing report, coupled with last week’s bleak economic forecast from the Congressional Budget Office, shows a pattern of weakness in the Obama economy that has too many Americans still asking, ‘Where are the jobs?’” Boehner said in a blogpost.
“Americans are suffering the consequences of Senate Democrats’ inaction, and they deserve better. With job growth slowing to its lowest level this year, Senate Democrats are out of excuses for stalling the dozens of House-passed jobs bills that are stuck in that chamber. It’s time for them to get to work.”
Jason Furman, chairman of the White House’s council of economic advisers, said the US economy had added 10m private-sector jobs over 54 straight months of job growth. “This figure is a marker of the progress that has been made, but also a reminder that more must still be done to create jobs, especially for the long-term unemployed, and grow the middle class. Although the pace of job gains in August was below recent months, the broader trends are moving in the right direction,” he wrote in a blogpost.
US stock markets were largely unmoved by the news, dipping slightly in morning trading. Gus Faucher, senior economist at PNC Financial, said: “The weaker job growth in August is inconsistent with a long list of other measures - initial unemployment insurance claims, the ISM [manufacturing] surveys, auto sales, construction spending, and many others - that show above-trend growth.”
He predicted that the weak August numbers were likely to be revised higher, and job growth would bounce back in September. “It could be that the seasonal adjustment factors for August understated job growth for the month, perhaps due to the early Labor Day weekend, perhaps due to shorter-than-usual shutdowns for auto plant retooling,” he said.
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