U.S. Job Growth Unexpectedly Grinds To A Halt In August

(RTTNews) - Anemic private sector job growth was offset by a drop in government jobs to produce essentially no job growth in the U.S. economy in August, according to figures released Friday by the Labor Department.

The total non-farm payroll level for August showed that there were no new jobs created for the month compared to a downwardly revised increase of 85,000 jobs in July.

Most economists had expected a relatively weak level of job creation, predicting an average of 60,000 new jobs, but had been more optimistic. The job creation numbers are the worst since September 2010, when the economy shed 29,000 jobs.

At the same time, the Labor Department said that the unemployment rate held at 9.1 percent, unchanged from the previous month and in line with economist estimates.

Paul Ashworth, Chief U.S. Economist at Capital Economics, said, "Nevertheless, the broad message is that even if the U.S. economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."

Overall, the private sector did add jobs in several industries, though all but 17,000 of those new jobs were offset by job losses in the information industry, which lost 48,000 jobs in August.

However, 45,000 of those information job losses were due to a strike at Verizon Communications (VZ) that has since been resolved.The health care, professional business, and mining sectors added jobs, while manufacturing employment saw a slight decline.



A loss of 17,000 government jobs offset the private sector gains, putting the overall job creation level at zero, a statistical fluke not seen since 1945.

The report also showed that average hourly earnings decreased by 3 cents in August, a 0.1 percent decline. Most economists had expected a modest 0.2 percent increase.

The average workweek edged down to 34.2 hours, while most economists had expected it to hold steady.
The number of unemployed people without a job for 27 or more weeks held steady in August at 6 million, accounting for 42.9 percent of the unemployed.

Although the overall unemployment rate was unchanged, the labor force rose to 153.6 million, while the number of discouraged workers came in at 977,000.

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