August Employment Comes in Below Expectations

By Toni Vranjes

September 6, 2013

The economy created 169,000 new jobs last month, fewer than predicted by economists.

In August, retail trade and health care drove the gains. Employment in retail trade increased by 44,000, and health care added 33,000 jobs. Still, the economy failed to produce the 180,000 new jobs that were forecast.

down_arrow_7_pt_3The unemployment rate fell slightly, from 7.4 percent to 7.3 percent. In addition, the labor force shrank by 312,000, and the labor-force participation rate dropped from 63.4 percent to 63.2 percent.

The jobless rate declined “for all the wrong reasons,” Mesirow Financial economist Diane Swonk wrote in a blog post. “Participation in the labor force fell, as confidence in the ability to land a job deteriorated. The drop in participation among teens is particularly pronounced and much more than we would expect, even given the seasonal drop we usually see at this time of the year.”

Meanwhile, the Labor Department revised employment growth for two previous months downward. For June and July combined, employers created 74,000 fewer jobs than previously estimated.

Swonk concludes her analysis on a downbeat note: “The employment situation remains less than encouraging and took another blow with the revisions in August.”

Tags: , , ,

Leave a Reply

(required)

(required)