Big drop in employer hiring for August slows down U.S. economy

Despite surprising low job hiring numbers reported by the U.S. Labor Department on Aug. 5, analysts remain confident the U.S. economy is still healthy and growing. According to an Aug. 5 Associated Press news report, employers added just 142,000 jobs last month, well below the 212,000 average of the previous 12 months.

The Labor Department’s report indicated that the unemployment rate fell to 6.1 percent from 6.2 percent. But that was because more people without jobs stopped looking for one and were no longer counted as unemployed. However, analysts took Friday’s Labor Department report in stride. They noted that other gauges of the economy — from manufacturing and construction to auto sales — remain solid. Also, layoffs have dwindled as well.

The figures “will inevitably spark speculation that the US recovery is somehow coming off the rails again,” said Paul Ashworth, an economist at Capital Economics in the Associated Press news report. “However, we’re not too concerned by what is probably just an isolated blip.”

The Labor Department report showed the smallest job gains in eight months. The weaker-than-expected numbers make it unlikely that the Federal Reserve will speed up its timetable for raising interest rates. Most analysts expect the first rate hike around mid-2015.

The biggest drops in hiring in August occurred in retail, which shed 8,400 jobs after gaining 21,000 in July, and in manufacturing, where employment was flat after a gain of 28,000 in July. “August’s job figures tend to be unusually volatile and are typically revised later as government statisticians adjust for unusual seasonal factors such as the reopening of school and the Labor Day holiday,” said Patrick O’Keefe, director of economic research at the accounting and consulting firm CohnReznick.

A broader measure of unemployment, which includes workers who have given up looking for jobs and the part-timers who want full-time work, dipped to 12 percent from 12.2 percent in July. That’s the lowest level since 2008, though far above the pre-recession figure of 8.8 percent.