Jobless Rate Down to 7.3% in August EPI: ‘It’s Not Time to Take Our Foot Off the Gas’

WASHINGTON—The nation’s unemployment rate declined 0.1% in August, to 7.3%, the Bureau of Labor Statistics said.  A separate survey showed businesses claimed to create 169,000 new jobs last month.

The data led pro-business economists to predict the Federal Reserve Board would start pulling back from some of the measures it instituted over the last few years to boost the economy and hiring.  And other studies show GOP-mandated federal budget cutting is also hampering job growth – and even leading to firings and layoffs.

Those storm signals led Heidi Shierholz, jobs expert at the Economic Policy Institute, to strongly dissent.  “It’s not time to take our foot off the gas,” she declared.

“We still need all macroeconomic guns blazing to boost the economy,” she said. “The average monthly growth rate of the last three months (is) just 148,000 jobs.  At this rate, it would take until well into 2021 to fill our gap of 8.3 million jobs and return to a healthy labor market.

“Furthermore, though the unemployment rate dropped in August, it was for all the wrong reasons.  Remember, jobless workers are not counted…unless they are actively looking for work.  If our 3.8 million ‘missing workers’ — workers who dropped out of, or never entered, the labor force due to weak opportunities in the Great Recession and its aftermath — were in the labor force looking for work, the unemployment rate would be 9.5% instead of 7.3%.”

BLS said 198,000 fewer people were jobless in August than in July, lowering the number of unemployed to 11.316 million.  But another 115,000 dropped out of the labor force that month, it noted.

That doesn’t count workers who are so discouraged they stopped seeking jobs, or who toil part-time even though they want full-time work.  Combined, 13.7% of all workers were unemployed and underemployed in August, down from 14% in July and 14.3% in June.  On the other hand, 37.9% of officially unemployed workers have been jobless for more than six months, meaning they’ve exhausted their regular jobless benefits.  That’s up from 37% in July.

Factories reported creating 14,000 jobs in August, reversing a 16,000-job loss in July.  Credit the car companies: They created 18,800 jobs in August.  There were 11.963 million employed factory workers in August, and 968,000 (6.2%) jobless ones.

Joblessness in construction was 9.1% in August, the height of the building
season.  But that still left 758,000 officially unemployed construction workers, and construction union leaders contend the figures understate joblessness in their sector – since a worker is counted as employed for the entire month if he or she works one day in the survey week.  Construction employment, 5.798 million, was unchanged in August.

Services reported creating 134,000 jobs in August, but – again – they were in low-paying sectors.  One-third (44,000) were in retail trade, 13,100 were temps, 32,700 were in health care and 21,200 were in bars and restaurants.

Governments added a net of 17,000 jobs in August, to 21.83 million.  That’s because local schools geared up to reopen, adding 20,100 workers all by themselves.

– PAI