US Labor Market Slumping, Even as Jobless Rate Falls

Posted September 7th, 2012 at 1:45 pm (UTC-5)
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The slumping U.S. labor market added a meager 96,000 jobs last month, but the country's unemployment rate declined as more Americans abandoned their search for work.

The government reported Friday that the August jobless rate was 8.1 percent, down from 8.3 percent in July. It was the 43rd straight month that the figure has been above an unusually high 8 percent level, as the country continues to struggle to recover from the depths of the recession in 2008 and 2009.

The relatively small number of new jobs was down from the 141,000 increase in July that was smaller than initially estimated. The employment reports could prompt the country's central bank policy makers to adopt new policies when they meet next week in an attempt to spur employment growth and trim the jobless rate. Federal Reserve Chairman Ben Bernanke has said the lack of job growth is one reason the central bank may need to act.

The state of the U.S. economy, the world's largest, is the central issue in the country's very close presidential election campaign. It's now less than nine weeks before the November 6 vote. The monthly jobs and unemployment numbers have played pivotal roles for Republican challenger Mitt Romney and the Democratic incumbent, President Barack Obama, in their competing claims about who can boost the sluggish recovery.

Mr. Romney said Friday's report showed that the president “hasn't lived up to his promises and his policies haven't worked.”

The president, at a campaign rally in New Hampshire, pointed to steady job growth over the last 30 months, but acknowledged the advance was not big enough.

“Today we learned that after losing around 800,000 jobs a month when I took office, business once again added jobs for the 30th month in a row, a total of more than 4.6 million jobs. But, that's not good enough. We know it's not good enough. We need to create more jobs faster.”

Mr. Romney says his years as a venture capitalist give him the experience needed to boost job growth at a substantially faster pace than Mr. Obama. Surveys of voters show they think Mr. Romney is better suited to handle the national economy.

But the surveys also show voters like the president more on a personal level. Mr. Obama is telling voters that more time is needed to recover from the country's worst economic downturn since the Great Depression of the 1930s. No U.S. president has been re-elected since World War II with a jobless rate above 7.4 percent.

More than 12 million U.S. workers are unemployed and the jobless rate has remained stubbornly above 8 percent since February 2009, Mr. Obama's first full month in office. The unemployment rate is unusually high for the U.S. labor market, where 5 to 6 percent is more normal. Millions more people are working at part-time jobs or at jobs they consider beneath their skill level.

Even as relatively few new jobs have been added to the labor market, the U.S. jobless rate has occasionally fallen, as it did last month, because thousands of workers stopped looking for new jobs. The government only counts the jobless as unemployed if they are looking for work.