Employers add no net jobs in August; rate unchanged

Posted September 2, 2011


— Employers added no net workers last month and the unemployment rate was unchanged, a sign that many were nervous the U.S. economy is at risk of slipping into another recession.

The Labor Department said Friday that total payrolls were unchanged in August, the weakest report in almost a year. It's the first time since February 1945 that the government has reported a net job change of zero. The unemployment rate stayed at 9.1 percent.

A strike by 45,000 Verizon workers lowered the job totals. Those workers are back on the job.

Job gains in June and July were revised lower, to show 57,000 fewer jobs added. The downward revisions were all in government jobs. The average work week also declined and hourly earnings fell by 3 cents to $23.09.

The economy needs to add closer to 250,000 jobs per month to rapidly bring down the unemployment rate, which has been above 9 percent in all but two months since May 2009.

Weak growth, a downgrade of long-term U.S. debt and a sell-off on Wall Street likely kept some businesses from hiring.

And a strike at Verizon Communications Inc. last month is also expected to lower the job totals. As many as 45,000 Verizon employees were off the payrolls for about two weeks. Those employees are back at work.

Still, recent data show consumers and businesses weren't nearly as spooked by the summer shocks as some economists had feared.

Most retailers reported that sales grew last month. Target Corp., Macy's Inc., teen retailer Wet Seal Inc. and warehouse club operator Costco Wholesale Corp. all posted sales gains that beat Wall Street expectations. Luxury chains such as Nordstrom Inc. and Saks also fared well.

And car buyers lifted U.S. sales last month. Analysts had expected a weaker August because of anxiety about the economy and Hurricane Irene, which forced many dealers to close during the month's final weekend.

The manufacturing sector managed to expand in August for the 25th straight month. Last month's growth, though modest, defied fears that manufacturing, one of the economy's few sources of strength, had contracted last month.

Meanwhile, fewer people applied for unemployment benefits last week, a sign that layoffs have eased a bit.

All that delivered a sense of relief that the economy is still expanding — even if it's not enough to reduce the unemployment rate, raise wages and drive the housing market out of its depression.

The economy expanded at an annual pace of only 0.7 percent in the first six months of the year. That was the slowest six months of growth since the recession officially ended in June 2009.

Employers added an average of 72,000 jobs from May through July, down from an average of 215,000 per month in the previous three months.

Most economists forecast that growth may improve to about a 2 percent annual rate in the July-September quarter. But that's not fast enough to generate many jobs.

The economy's weakness was underscored Thursday by the Obama administration, which estimated that unemployment will average about 9 percent next year, when President Barack Obama will run for re-election. The rate was 7.8 percent when Obama took office.

The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.

Next week, Obama will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth.


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  • flashsparks Sep 2, 2011

    "america is getting exactly what it has wished for - positive growth in private sector jobs and negative growth in public section jobs."

    Amem to that. That's the Obama socialist plan at work!

  • jason19 Sep 2, 2011

    America did this to itself. As long as you keep electing people who don't have your best long-term interests at heart, the worse things are going to get.

    America *voted* to have jobs drastically cut in the public sector. So now, that's exactly what we have. Our overall workforce -- public sector and private sector combined -- is now smaller than it was a year ago. In other words, more are either on unemployment or given up by now and fewer are working any job. But again, this *is* what we voted for when we voted for extremist conservatives, so don't act like this is a surprise. You can be conservative *without* being an extremist, but that's what we have now.

  • Plenty Coups Sep 2, 2011

    "... BUT gov't has 10,000's of other positions who are grossly under owrked, overpaid and inefficient. Deal with the NCDENR, NCDOT or Raleigh/Cary/Durham gov't for a few weeks and see for yourself."

    The NC DOT is still necessary. The NCDENR is important to those who care about the environment. Underworked? I don't know. I know our teachers aren't. Overpaid? Doubtful. State pay in NC is very low. Teacher pay is near the bottom in the entire nation. Every corporation has inefficiencies and state agencies perform vital functions that for profit industries wouldn't want to take on. All I'm seeing from you are blanket assumptions and talking points.

  • archmaker Sep 2, 2011

    what's wrong with this jobs report? america is getting exactly what it has wished for - positive growth in private sector jobs and negative growth in public section jobs.

    just becareful of what you wish for.

  • WooHoo2You Sep 2, 2011

    Repeal Obamacare, cut corporate taxes, cut Gov't regulations....then sit back and watch the economy take off!!-lkahn1

    Sounds like China, well they don't have "Obamacare." Have fun getting paid with cents not dollars. Another benefit is there will be no unemployed five year olds.

    I'll move before that happens...

  • WooHoo2You Sep 2, 2011

    Worse yet, they do not promote job growth in the private sector."-mep

    A stable, safe, and educated workforce promotes a healthy job environment- Plenty Coups

    I think Mep just got served ;)

  • WooHoo2You Sep 2, 2011

    owrked, overpaid and inefficient. Deal with the NCDENR, NCDOT or Raleigh/Cary/Durham gov't for a few weeks and see for yourself.-Boylan

    I don't think any of those offices that have many / any "overpaid" employees.

  • Ripcord Sep 2, 2011

    "They (spending cuts) would also have the direct effect of substantially increasing unemployment."

    Most of people who would lose their jobs are gov't employees. It would have virtually no impact on private sector employment. The private sector is far larger than the public/private nexus.

    There is no point in pretending that the fate of the US economy rests on continued deficit spending. That's drivel.

  • Boylan Sep 2, 2011

    "You forgot to mention necessary and important in most cases. Kind of like prosecutors, police, teachers etc." Plenty Coups

    If those were the only gov't employees your argument might have a little merit BUT gov't has 10,000's of other positions who are grossly under owrked, overpaid and inefficient. Deal with the NCDENR, NCDOT or Raleigh/Cary/Durham gov't for a few weeks and see for yourself.

  • Boylan Sep 2, 2011

    All Liberals say is raise corp taxes on the rich. But can't or won't answer what level of taxation is high enough.-Boylan

    "Can you answer what level is "low enough?"" woohoo2u

    Once again deflecting the question because you don't have an answer. The liberal playbook simply states raise taxes on corp and the wealthy.

    My answer is do away with income and property taxes and go to a sales tax on everything including services. I haven't run the numbers but 25% or so should provide the appropriate revenue. Now maybe food could have a lower sales tax but that is a slippery slope.

    Your turn.