Money Matters - Simplified

No new jobs added in August, jobless rate steady at 9.1%

Unemployment remained unchanged in August as employers added no new jobs during the month. The dismal numbers are likely to add pressure on President Barack Obama to do more to stimulate hiring.

The latest report on unemployment statistics is nothing to cheer about. In fact, it points to the dark clouds of recession hovering over the U.S economy. U.S economy.

Data of the Bureau of Labor Statistics (BLS) revealed that the non-farm payrolls practically did not grow at all against an expected payroll growth of 50,000 plus.

Private sector adds merely 17,000 jobs
The private-sector employers added an insignificant number of jobs in August as the unemployment rate in the country remained at 9.1 percent.

The tally of unemployed and underemployed put together, the broadest measure of the unemployment rate that the government uses, stood at around 16.2 percent.

To put things in perspective, merely 17,000 private sector jobs were added in August, as against an average of 164,000 new jobs in each of the previous seven months of the year.

This little gain was offset completely as the government sector, including the federal, state and local public agencies, shed 17,000 jobs last month.

Economists are unanimous in their opinion that the United States needs to add at least 250,000 jobs every month if it wants to reduce unemployment.

“The economy has stalled-out in the wake of the debt-ceiling spectacle and S&P downgrade. Businesses stopped hiring last month and government continues to cut workers,” Mark Zandi, chief economist for forecaster Moody's Analytics.

Threat of recession looms large
To add to the woes of the employees on private non farm payrolls, the average hourly earnings decreased by 3 cents to $23.09 in August. They had risen by 11 cents in July.

Economists are unanimous in their opinion that the United States needs to add at least 250,000 jobs every month if it wants to reduce unemployment.

August’s dismal numbers bring back the memories of recession. The report also cements the apprehension that the economy will not rebound even in the second half of the year.

“The broad job weakness across industries and the decline in hours worked suggest the economy is perilously close to double-dipping” back into recession, added Zandi.