There’s not much for me to personally say about this report except that it’s a total disaster for an economy that is supposedly 2 years+ into a recovery. At some point, I think people will start wondering whether maybe this downturn isn’t a different kind of animal….Econoday has an excellent summary of this morning’s payrolls report:
“Apparently, the recent federal debt ceiling debate fiasco and stock market decline spooked businesses to put a hold on hiring. Payroll jobs were unchanged in August, following a revised 85,000 increase in July, and revised 20,000 in June. The market consensus (updated Thursday afternoon) called for a 60,000 increase for the latest month. Revisions for June and July were down net 58,000. As in recent months, private sector employment was a little less weak since government jobs pulled down the total. Private nonfarm payrolls edged up 17,000 in August, following a 156,000 gain in July and 75,000 increase in June. The August figure came in sharply lower than the median estimate for a 75,000 increase.
In the private sector, goods-producing jobs edged down while service-providing jobs rose modestly. Goods-producing jobs slipped 3,000, following a 52,000 rise in July. Manufacturing jobs dipped 3,000 after a 36,000 boost the month before. Construction employment declined 5,000 after increasing 7,000. Mining expanded 6,000, following an 8,000 gain in July.
Private service-providing jobs rose 20,000 in August, following a 104,000 increase prior month. The August gain was led by health care (up 29,700) and professional & business services (up 28,000). In the latter category, temp services rose 4,700. Telecommunications led on the downside, falling 47,300 and with about 45,000 due to striking Verizon workers. Looking for any bright spot, adjusted for the Verizon strike, private payrolls rose 62,000 in August-which is still very anemic.
The public sector continued to contract as government employment fell 17,000, following a 71,000 drop in July. The drop was led by a 20,000 decrease at the local level with the federal government down 2,000. The return of about 22,000 Minnesota government workers from a partial government shutdown offset declines elsewhere as state employment rose 5,000.
Earnings growth fell back from the auto-sector induced jump in July. Average hourly earnings slipped 0.1 percent after jumping 0.5 percent in July. The market median estimate was for a 0.2 percent increase. The average workweek for all workers in August edged down to 34.2 hours from 34.3 in July. The consensus had called for 34.3 hours.
From the household survey, the unemployment rate posted at 9.1 percent, equaling the prior month and expectations.
Today’s report clearly shows that momentum in the labor market has stalled. The curiosity is that while hiring has come to a standstill, layoffs have not picked up. Still, today’s news is not good news for the economy and places more emphasis on the importance of President Barack Obama’s upcoming plan for job creation and on whether the Fed will engage in QE3. The odds of another round of quantitative easing just went up.”