The August jobs numbers were released by the Bureau of Labor Statistics Friday morning. By itself, the figure of 169,000 jobs added in August is off the pace (initial survey data prior to the Friday release predicted the economy would add between 170,000 and 175,000 jobs), but not terribly surprising. The numbers for July were off by a much larger amount (58,000), and August (being the month that nearly everyone goes on vacation at some point) is usually slower than average for hiring.
What is more troubling is the fact that the unemployment rate dropped to 7.3%. That’s a good thing, right? Not really in this case. The unemployment rate didn’t drop due to new job creation, but mainly because so many people have given up on finding new employment. The labor force participation rate (defined as the ratio of people working or actively seeking work to the overall working age population) is a key economic measure–and as of August, that number hit a 35 year low. It took a big hit during the 2007-08 recession–dropping nearly 2% in that two year period–and has been on a steady decline ever since.
The talking heads on different ends of the ideological spectrum will assign different reasons as to why this is the case. The bigger concern is how do we correct it.
There was one bright spot in the report: Temporary employment jobs–often a bellwether of increased employment (as employers have additional staffing demands but may not be ready to add an FTE headcount) increased by 13,000. And Seattle (my hometown) ranked #1 in the nation in job creation. That’s a double-edged sword for those of us in recruiting, of course, because it means competition for talent in our local market is even more intense than before–but I welcome that kind of problem.