August unemployment at 9.7 percent; 216,000 jobs lost

September 4, 2009

The unemployment rate in August jumped to 9.7 percent from 9.4 percent. The economy lost another 216,000 jobs. While the economy may be shifting into recovery mode, the labor market clearly still needs lots of work. The best-case scenario I can find (4 percent GDP growth next year) still would have the jobless rate at 8.5 percent or so a year from now. Also note that the labor force participation rate remained steady last month. So the blip up in unemployment was not caused by discouraged workers returning to the workforce. Also the broader U6 rate surged to 16.8 percent.

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