The U.S. economy grew slightly during August, adding 169,000 jobs. This, along with other factors, was enough to push the unemployment rate down to 7.3 percent, its lowest level since December, 2008.
Lower unemployment rates are nothing to frown at, but they can be misleading. August’s lower rate was due, in part, to fewer people in the labor force. And when you consider the number of discouraged workers- those who have given up trying to find work and are not counted in the official unemployment numbers- the actual unemployment rate is still above 13 percent according to most economic estimates.
August’s 169,000 new job positions didn’t do much to excite most economists and to make matters worse, previous estimates for preceding months were revised lower. July's job growth figure was reduced to 172,000 from 188,000 while June’s figure was cut drastically from 162,000 to 104,000.
Other statistics paint an equally bleak picture. The unemployment rate among African Americans increased from 12.6 percent to 13 percent in August and the average duration of unemployment for all jobless workers reached a five-month high at 37 weeks. And the majority of the gains were in areas that traditionally do not pay very well. Retail jobs led the way, with 44,000 new positions followed by health care at 33,000, professional and business services at 23,000 and bars and restaurants at 21,000.
Still, in spite of the disappointing Bureau of Labor Statistics numbers, reactions on Wall Street were positive. Stock indices are up in the U.S. in early trading and interest rates are lower. Investors, however, are heeding caution and waiting to see a reaction from the Fed, which now may delay any attempts to end economic stimulus in light of the official August employment figures.
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