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The economy added 142,000 jobs in August. It was a pretty big disappointment, considering the consensus estimate was around 225,000. The unemployment rate ticked down to 6.1% from 6.2% — bad news, since the decline comes from people dropping out of the labor force, rather than people getting jobs. Nick Bunker and Heather Boushey sum it up: “The U.S. economy is steadily if slowly expanding but not enough to spark sustained growth in jobs and wages and a commensurate decline in unemployment.”
Cardiff Garcia writes that “the report is hard to reconcile not only [with] other recent indicators [ISM data was great, auto sales are up, initial jobless claims were unchanged in August] but also with the obviously stronger momentum in prior jobs reports this year.” However, he continues, “if the acceleration in the recovery since the end of the first quarter has slowed, it wouldn’t be the first time that the US economy has head-faked observers.”
There is, however, a little bit of positive news. The number of workers working part time for economic reasons declined, and the number of long-term unemployed is down to early 2009 levels. Plus, given that the data is noisy, it’s important to remember that “right now 2014 is still on pace to be the best year for both total and private sector job growth since 1999,” says Bill McBride. Further, Jared Bernstein writes that “the safest conclusion from this numbers is this: August’s lousy report notwithstanding, we are solidly in the midst of a moderate jobs recovery.” If you smooth the data for the last year, the economy is growing at a clip of 207,000 jobs per month, says Bernstein.
The question at this point, it seems, is what’s going on with prime-aged workers? The employment rate for 25-54 year-old workers is still too low, say the Bloomberg View editors. “As of August, about 76.7 percent of people aged 25 to 54 were employed… still about 3.9 million jobs short of 79.8 percent, the average ratio over the 10 years through 2007.” Brad DeLong says there’s no way this trend “is simply a continuation and acceleration of structural trends that had been ongoing since 1990.” Given that, the question remains — when will we finally recover? — Shane Ferro
On to today’s links: