The Bureau of Labor Statistics came out with the government's estimates of economic performance for August today. The news is, as it has been for a long time, mediocre. BLS estimated 169,000 jobs were added in August and the unemployment rate dipped to 7.3%.
That sounds mediocre, and it is. Economic forecasters were hoping for much better. The overall situation might be worse than those top-line numbers suggest.
BLS revised its estimation of previous months - they now think that the American economy added 74,000 fewer jobs in June and July than they had initially estimated. That's some of the biggest news here. July had been reported at 162,000 jobs added, and BLS revised that down to a positively pathetic 104,000 jobs. Additionally, the labor force participation rate fell again to a level not seen since the '80s. This continues the trend that has been ongoing for a long time:
The Bureau of Labor Statistics keeps statistics on the labor force participation rate, the ratio of the total workforce to total employment-age Americans. Since the economic crisis, the participation rate has dropped from 66.4% to 63.4%.
Overall, the growth of the labor force beat population growth, but not by much. The labor force participation rate is now at 63.2%. Additionally, government employment grew by 17,000 jobs - but that was driven at the state level. Federal government employment was unchanged in August.
On the plus side, the growth in part-time workers slowed. Those who were employed part time for economic reasons fell while those employed part time for noneconomic reasons grew only very slightly. The economy is hopefully tapping the breaks on the growth in part-time work. As noted before, though, the trend downward for the size of the labor force continues to be troubling. There may be workers who were employed part-time who simply gave up attempting to participate in the economy.
The Federal Reserve is scheduled to "taper" their current regime of monetary stimulus if they project that the economy continues improving. It's unclear if this jobs report will be sluggish enough to cause Fed chariman Ben Bernanke to re-think the tapering strategy.
The Wisdom of Bastiat, as Revealed by Great Moments in Federal, State, and Local Government | Daniel J. Mitchell