U.S. job growth slowed much more in August than it did in July, while the unemployment rate edged down 0.1 percent.
According to the most recent monthly report from the Bureau of Labor Statistics (BLS), the private sector netted 134,000 nonfarm job gains while local, state, and federal governments netted 8,000.
The total net job gain in August was 142,000, the fewest monthly job gains since 84,000 in December 2013. According to USA Today, economists had expected 220,000 net job gains in August. The August unemployment rate was 6.1 percent, down slightly from 6.2 percent in July.
The private sector has gained nonfarm jobs for 54 consecutive months since the Great Recession. Before August, the U.S. economy had created an average of 230,000 jobs per month for six consecutive months, the longest such streak since 1997.
The BLS revised net job gains for June and July, showing that the economy netted 28,000 fewer jobs than it had previously reported. The average job gain in each month for the prior twelve months is now 212,000.
At 47,000, job growth continued in the professional and business services industry. Administrative and support services gained 23,000 of those, while temporary help services (“temp workers”) gained 13,000. The industry as a whole has netted 639,000 jobs over the past year. Jobs in the professional and business services industry typically pay better than do those in many other industries.
Health care added 34,000 jobs in August. Much of the industry’s steady job growth over the past few years, even throughout the Great Recession, is attributable to the increasing medical demands of aging baby boomers and the ever-growing obesity epidemic, and to provisions in the Affordable Care Act as well.
Manufacturing, an industry that economists consider to be a gauge of labor market health, didn’t gain any jobs in August. Automakers shed 4,600 jobs in August by recalling fewer workers than usual, after laying off workers in the previous month to retool.
Employment in the construction industry continued to trend upward in August, with 20,000 net job gains. The industry has gained an average of 18,000 jobs per month over the past year.
Among the major work groups tracked by the BLS, teenagers again suffered the highest unemployment rate (19.6 percent) followed by blacks (11.4), Hispanics (7.5), adult women (5.7), adult men (5.7), whites (5.3) and Asians (4.5, not seasonally adjusted). Only teenagers and Hispanics experienced unemployment rate drops from July. All other groups saw no change.
Workers who are 25 years of age or older and who have earned four-year college degrees or higher experienced a 3.2 percent unemployment rate in August, up from 3.1 in July. Those in the same age group and who don’t have high school diplomas suffered a 9.1 percent rate, down from 9.6 in July.
The unemployment rate dropped slightly in August, mostly because more workers stopped looking for jobs. For the BLS to count workers as unemployed (to calculate the unemployment rate), they must be actively seeking jobs in the four weeks preceding the count.
The BLS counted 9.6 million workers as unemployed in August, down from 9.7 in July. The number of unemployed workers has declined by 1.7 million over the past year, while the unemployment rate has declined by 1.1 percentage points.
The count of unemployed workers does not include those who are involuntarily working only part time and with fewer benefits, if any, such as no health insurance, because they can’t find full-time jobs or employers cut their work hours. The number of involuntarily part-timers in August was 7.3 million, down from 7.5 million in July.
The average workweek for both part-timers and full-timers was 34.5 hours in August, the same as it was in the prior five months. Average hourly earnings rose 6 cents to $24.53 for all private-sector employees, and by 6 cents to $20.68 for private-sector production and nonsupervisory employees. Average hourly earnings have risen by 2.1 percent in a year.
The unemployment rate also does not include “marginally-attached” unemployed workers. The BLS does not count them in the official rate because they stopped looking for work in the four weeks preceding the count, for reasons such as school attendance, family matters or their collective perception that there simply are no jobs.
The number of marginally-attached workers in August was 2.1 million, down from 2.2 million in July. Among the marginally-attached, 775,000 were so-called “discouraged workers” because they gave up looking for work due to their shared perception that there are no jobs — at least not for them. The number of discouraged workers was up by 34,000 from the 741,000 that the BLS initially reported for July. (The BLS does not seasonally adjust any of the figures in this paragraph.)
The number of long-term unemployed workers, those who have been without jobs for 27 weeks or longer, was 3.0 million in August, down from 3.2 million in July. These workers accounted for 31.2 percent of the unemployed. The number of long-term unemployed workers has declined by 1.3 million over the past year. Standard state unemployment benefits last only up to 26 weeks without extensions.
Congressional Republicans have refused to pass a bill to further extend federal unemployment benefits. See the blog “Unemployment Benefit Extensions 2013 – Updated for 2014” for details.
If you are a recent victim of job loss or a reduction in work hours resulting from the high unemployment rate, then you might be eligible to collect full or partial unemployment benefits from the state unemployment office. You might also be eligible to continue your employer-provided group health insurance coverage through COBRA.
For more details about the August 2014 unemployment rate and job numbers, see the “Employment Situation Summary” by the BLS. The BLS plans to report the September 2014 unemployment rate and job numbers on October 3. To receive notification like the above automatically, subscribe to Employee Rights Blog for free.
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Certain figures in this unemployment rate report were rounded and/or seasonally adjusted by the BLS, and are subject to revision by same (based on additional data that was not initially available). The unemployment rate chart pictured above was provided by the BLS.