Data Show Weaker Job Growth in August

By Toni Vranjes

September 5, 2014

New government data show that job growth slowed in August – but economists say that the employment figure isn’t as worrisome as it might seem.

The total number of jobs added last month was 142,000, which failed to meet economists’ expectations. The consensus estimate for August was 225,000 jobs, according to IHS Global Insight.

In contrast, employers created 212,000 jobs in July, and they added 267,000 jobs in June, according to revised government numbers.

down_arrow-6_pt_1The nation’s unemployment rate fell from 6.2 percent to 6.1 percent, as the labor force dropped by 64,000, according to the Labor Department.

Two key areas of growth were professional and business services, which expanded by 47,000, and health care, which added 34,000 jobs. Meanwhile, retail trade lost 8,000 jobs. In a blog post, Mesirow Financial economist Diane Swonk noted that the retail-trade decline was partly attributable to an East Coast strike. In an analysis, IHS economist Doug Handler also pointed to another factor that drove employment down: unusual hiring patterns in vehicle manufacturing.

Although both economists did express concerns about anemic labor-force participation, they’re confident that the disappointing payroll figure is a fluke.

“August’s employment report is clearly not as strong as the previous six months, but it’s not weak enough to declare that a turning point is imminent with respect to economic growth,” Handler wrote. “We look forward to a September report that will demonstrate the August result to be a blip rather than a trend.”

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