August was a zero of a month, between the debt limit deal and the crisis of confidence it engendered in the country. And now, bookending August perfectly, we have the most poetic jobs report for August imaginable. The economy gained zero, ZERO, jobs in August. The month of August was brought to you by the number zero.
If you add in the downward revisions of June (+46,000 to +20,000), and July (+117,000 to
+85,000), there are less jobs in the economy since the last report. But I think that big fat zero at the top will actually look worse than if the economy lost jobs in August. It’s so evocative.
The topline unemployment rate remained steady at 9.1%. In their mid-session budget review released yesterday, the Office of Management and Budget predicted that unemployment would stay at 9.1% for the rest of the year, and would average 9.0% next year, an election year.
Once again, government employment dragged down the jobs report. In July, a government shutdown in Minnesota led to negative government numbers. This month’s numbers reflected all of those workers returning, a gain of 22,000. But government employment was still down, even with that, by a total of 17,000. Private employers gained by a thin 17,000 in August, canceling out the government employment loss. To the extent that any sectors did well, health care jobs gained in August. Manufacturing employment was basically flat (-3,000). The Verizon strike was a significant drag on the report, with a decline by 48,000 in the information industry. Since those 45,000 workers are back working at this point, if you want to be charitable you can say that the economy gained 45,000 workers in August, and it’s possible that future revisions will reflect that. But the zero is just too perfect.
Long-term unemployed persons (over 6 months) remained steady at 6.0 million in August, 42.9% of the total jobless.
The employment-participation ratio, a key measure, actually edged up 0.1% to 58.2%. The civilian labor force participation rate went up 0.1% as well, to 64.0%. These are still both near the lows for the year.
The average workweek edged down 0.1 hours to 34.2 hours, and average hourly earnings went down by 3 cents. So there’s almost nothing to point to in this report.
Perhaps the worst news for the President is that there will be additional numbers in September. The preliminary benchmark revision will be released on September 29, essentially a more accurate update of the numbers. Given how things have been going, that brings with it the potential for bad news.
UPDATE: Just a reminder here that government borrowing rates are basically negative when you adjust for inflation at this point, and so we could borrow enough money to put the country back to work at no cost.