Unemployment rate to 9.7%, 216,000 jobs lost
The U.S. economy lost 216,000 jobs in August according to figures released by the Department of Labor. This brought the unemployment rate up to 9.7% from 9.4% in July. Despite the large rise in the headline unemployment rate (U-3), the figure for job losses was in line with expectations and dovetailed with the figures released by payroll company ADP on Wednesday. However, revisions to data from June and July increased the cumulative incremental job loss by 69,000 bring the actual net change to last month’s figures to –285,000.
Clearly, the labor market is still quite weak. Below are a few statistics on the overall trend:
- Figures looked weaker using the household survey. The number of unemployed persons based on the this survey increased a massive 466,000, while the number employed edged down by 392,000.
- The 12-month loss in seasonally-adjusted non-farm payrolls (NFP) is still increasing and is at a business cycle high of 5.8 million.
- The cumulative job loss since the business cycle peak NFP is 6.9 million
- Non-farm payrolls in the U.S. economy peaked during the business cycle ending February 2001 at 132.5 million. A full 102 months later in August 2009, they were 131.2 million, 1.3 million lower. This is the weakest growth from the peak of one business cycle to the trough of the next since the Great Depression.
- Nevertheless, the 12-month change in the unemployment rate is now declining, which I have indicated in the past is a good sign of recession and recovery. In June, the increase was 3.9%. It was 3.6% in July and 3.5% in August.
Employment Situation Summary – U.S. Bureau of Labor Statistics