The August Employment Report was a bit disappointing, with the economy creating only 96,000 jobs. The unemployment rate dropped to 8.1%, but a lot of this was because job-seekers dropped out of the labor force. Where were the job gains and losses in the Bureau of Labor Statistics' report?The most job gains occurred in the following sectors:
- Leisure and hospitality -- 34,000 vs 27,000 in July.
- Business and professional services -- 28,000 vs 47,000 in the prior month.
- Health care -- 21,700 vs 19,100 last month.
- Retail trade -- 6,100 jobs, about the same as July.
The losers were not surprising. The auto industry lost 7,500 jobs, but this happened last year at this time. This helped to create an overall loss of 15,000 manufacturing jobs -- again, the same thing happened this time last year.
As expected, government continues to shed jobs -- 7,000 vs 21,000 last month. This is a nugget of good news, in that state and local budget problems are not causing the large layoffs we've seen in the last several years.
In what seems like bad news, but could be a second nugget, temporary help added 4,900 jobs. That could be because employers are feeling more confident about the economy, and are adding permanent rather than temporary positions.
The unemployment rate dropped from 8.3% to 8.1%. The unemployment report doesn't always sync up with the employment report because it comes from a household survey, instead of a business survey. For this reason, the unemployment report can be a little less accurate and is mostly used by analysts to give supplemental information about the workforce.
That being said, the number of unemployed -- those who have actively looked for work in the last month -- is at 12.544 million people. That's 250,000 less than last month. However, only 119,000 of them got jobs, and joined the ranks of the employed. That means the others dropped out of the labor force, either because they went back to school, got sick or had to care for relatives, or just gave up looking for work. The last category is known as discouraged workers, and the third nugget of good news is that this number fell from 852,000 in July to 844,000 in August.
A fourth nugget is that there are 152,000 fewer long-term unemployed than last month. These unfortunate people have been actively looking for a job for 27 weeks, and are consequently finding it more difficult to get hired.
A fifth nugget is that there are 120,000 fewer people who became unemployed because they lost their job or their temporary position ended. (Source: BLS, Employment Situation Summary )
What This Means for You
The employment picture continues to improve. There are more nuggets of good news than last month, even though the headline numbers aren't as rosy. If you are unemployed, look for work in the sectors that are growing. If you've been looking for a long time, share your frustration in What Causes Unemployment?
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