IBJNews

U.S. jobless rate dips despite disappointing hiring

Back to TopCommentsE-mailPrintBookmark and Share

U.S. employers added 169,000 jobs in August and much fewer in July than previously thought. Hiring has slowed from the start of the year and could complicate the Federal Reserve's decision later this month on whether to reduce its bond purchases.

The Labor Department said Friday that the unemployment rate dropped to 7.3 percent, the lowest in nearly five years. But it fell because more Americans stopped looking for work and were no longer counted as unemployed. The proportion of Americans working or looking for work fell to its lowest level in 35 years.

Analysts had predicted the U.S. would add at least 177,000 jobs in August.

July's job gains were just 104,000, the fewest in more than a year and down from the previous estimate of 162,000. June's figure was revised to 172,000, from 188,000. The revisions lowered total hiring over those two months by 74,000.

Employers have added an average of just 148,000 jobs in the past three months, well below the 12-month average of 184,000.

Dow Jones industrial average futures rose modestly after the report was released. The yield on the 10-year Treasury note fell to 2.87 percent, from 2.95 percent, in the first few minutes after the jobs figure was released.

The weaker jobs picture could make the Fed hesitate to scale back its bond buying. The Fed's $85 billion a month in Treasury and mortgage bond purchases have helped keep home-loan and other borrowing rates ultra-low to try to encourage consumers and businesses to borrow and spend more.

Chairman Ben Bernanke has said the Fed could begin slowing its bond purchases by year's end if the economy continues to strengthen and end the purchases by mid-2014. After its September policy meeting, the Fed will announce whether it will taper its monthly purchases and, if so, by how much.

"This was a horrible set of jobs figures, starting with large revision to last month's number," said Tom di Galoma, head of fixed-income rates sales at ED&F Man Capital.

Another concern for the Fed is that most of the hiring in August was in lower-paying industries such as retail, restaurants and bars, continuing a trend that began earlier this year. About 80 percent of the jobs created this year have been part-time positions. Retailers added 44,000 jobs in August, and hotels, restaurants and bars added 27,000. Temp hiring rose by 13,000.

Manufacturers added 14,000, the first gain after five months of declines. Construction jobs were unchanged in August. .

Auto manufacturers boosted hiring in August. Some of the jobs were workers who were rehired last month after being temporarily laid off in July, when factories switched to new models.

Americans are buying more cars than at any time since the recession began in December 2007. And U.S. factories expanded in August at their fastest pace in more than two years.

ADVERTISEMENT

Post a comment to this story

COMMENTS POLICY
We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
 
You are legally responsible for what you post and your anonymity is not guaranteed.
 
Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
 
No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
 
We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
 

Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

Sponsored by
ADVERTISEMENT

facebook - twitter on Facebook & Twitter

Follow on TwitterFollow IBJ on Facebook:
Follow on TwitterFollow IBJ's Tweets on these topics:
 
Subscribe to IBJ
  1. A Tilted Kilt at a water park themed hotel? Who planned that one? I guess the Dad's need something to do while the kids are on the water slides.

  2. Don't come down on the fair for offering drinks. This is a craft and certainly one that belongs in agriculture due to ingredients. And for those worrying about how much you can drink. I'm sure it's more to do with liability than anything else. They don't want people suing for being over served. If you want a buzz, do a little pre-drinking before you go.

  3. I don't drink but go into this "controlled area" so my friend can drink. They have their 3 drink limit and then I give my friend my 3 drink limit. How is the fair going to control this very likely situation????

  4. I feel the conditions of the alcohol sales are a bit heavy handed, but you need to realize this is the first year in quite some time that beer & wine will be sold at the fair. They're starting off slowly to get a gauge on how it will perform this year - I would assume if everything goes fine that they relax some of the limits in the next year or couple of years. That said, I think requiring the consumption of alcohol to only occur in the beer tent is a bit much. That is going to be an awkward situation for those with minors - "Honey, I'm getting a beer... Ok, sure go ahead... Alright see you in just a min- half an hour."

  5. This might be an effort on the part of the State Fair Board to manage the risk until they get a better feel for it. However, the blanket notion that alcohol should not be served at "family oriented" events is perhaps an oversimplification. and not too realistic. For 15 years, I was a volunteer at the Indianapolis Air Show, which was as family oriented an event as it gets. We sold beer donated by Monarch Beverage Company and served by licensed and trained employees of United Package Liquors who were unpaid volunteers. And where did that money go? To central Indiana children's charities, including Riley Hospital for Children! It's all about managing the risk.

ADVERTISEMENT