Unemployment Jumps to 9.7% in August

(CBS/AP)  The unemployment rate jumped almost half a point to 9.7 percent in August, the highest since 1983, reflecting a poor job market that will make it hard for the economy to begin a sustained recovery.

While the jobless rate rose more than expected, the economy shed a net total of 216,000 jobs, less than July's revised 276,000 and the fewest monthly losses in a year, according to Labor Department data released Friday. Economists expected the unemployment rate to rise to 9.5 percent from and job reductions to total 225,000.

By contrast, in a healthy economy, employers need to add a net total of around 125,000 jobs a month just to keep the unemployment rate stable.

"It's good to see the rate of job losses slow down," said Nigel Gault, chief U.S. economist at IHS Global Insight. But "we're still on track here to hit 10 percent (unemployment) before we're done."

That prediction was again echoed by White House Press Secretary Robert Gibbs, though he said progress is being made in slowing down the long string of job losses that the recession has caused.

Gibbs said that despite whatever progress the economy has made, President Barack Obama is still not satisfied.

The rise in the jobless rate was largely due to the government finding that the number of unemployed Americans jumped by nearly 500,000 to 14.9 million, while 73,000 people joined the civilian labor force. Those figures are from a different survey than the report on total job cuts.

The civilian labor force usually grows as a recession winds down and optimism about finding work grows. But as long as Americans remain anxious about their jobs, consumer spending isn't expected to rise enough to power a rebound.

"There isn't the underlying fuel there for strong consumer spending growth," Gault said.

Instead, most of the current rebound in the economy stems from auto companies and other manufacturers restocking inventories, which have plummeted as factories and retailers have sought to bring goods more in line with reduced sales.

Few economists think that can provide the basis for a sustainable recovery. Gault forecasts the economy will grow at a 3.7 percent clip in the current July-September quarter, but expects that to fall to 2.4 percent by the fourth quarter and 2 percent in the first quarter next year.

Analysts expect businesses will be reluctant to hire until they are convinced the economy is on a firm path to recovery. Many private economists, and the Federal Reserve, expect the unemployment rate to top 10 percent by the end of this year.

If laid-off workers who have settled for part-time work or have given up looking for new jobs are included, the so-called underemployment rate reached 16.8 percent, the highest on records dating from 1994. That rate rose because the number of workers settling for part-time hours, either because their employer cut their work week or because that's all they could find, increased by about 300,000.

But earnings rose and the number of hours worked stayed above a recent record-low. Average hourly wages increased to $18.65 from $18.59, the department reported. Average weekly earnings increased to $617.32.

The number of weekly hours worked remained at 33.1, above the low of 33 reached in June. That figure is important because economists expect companies will add more hours for current workers before they hire new ones.

On Wall Street, stocks moved in a narrow range in midday trading. The Dow Jones industrial average added about 11 points, and broader indexes also edged up.

The recession has eliminated a net total of 6.9 million jobs since it began in December 2007. Job cuts last month remained widespread across many sectors.

The construction industry lost 65,000 jobs, which caused some economists to note that the Obama administration's $787 billion stimulus package hasn't yet stemmed layoffs in that industry.

"It doesn't look like a whole lot of those 'shovel ready' projects have been started," Joel Naroff, president of Naroff Economic Advisors, wrote in a note to clients.

Factories cut 63,000 jobs, while retailers pared 9,600 positions. The financial sector eliminated 28,000 jobs, while professional and business services dropped 22,000. Even the government lost 18,000 jobs, as the U.S. Postal Service cut 8,500 positions, and state and local governments laid off teachers and other school workers.

Health care and educational services was the only bright spot, adding 52,000 workers.

And the pace of layoffs is slowing. Job losses averaged 691,000 in the first quarter and fell to an average of 428,000 in the April-June period.

Other economic data released this week has been positive. The Institute for Supply Management, a trade group, said Tuesday that the manufacturing sector grew in August for the first time in 19 months. On Thursday, the ISM said its service sector index rose to 48.4 last month, the highest level in nearly a year. Home sales, meanwhile, have for several months and prices are stabilizing.

Federal Reserve policymakers said in minutes from an August meeting that they expect the economy to recover in the second half of this year. But labor market conditions are still "poor," the Fed minutes released Wednesday said, and many companies are likely to be "cautious in hiring" even as the economy picks up.

Some economists credit the stimulus package of tax cuts and spending increases, along with the , with contributing to a recovery. But they worry about what will happen when the impact of the stimulus efforts fades next year.

Administration officials argue the stimulus has already saved about 135,000 jobs. Labor Secretary Hilda Solis said Friday that funds are still being injected into the economy and will continue to spur recovery.

"The recession has done more damage than could ever be fixed in half a year," Solis said.

Vice President Joe Biden Thursday against Republican critics who say it is too costly.

"The recovery act has played a significant role in changing the trajectory of our economy, and changing the conversation in this country," Biden said. "Instead of talking about the beginning of a depression, we are talking about the end of a recession."

Republicans criticized Biden's speech. "The Democrats' rhetoric on their economic experiment doesn't match with the reality of millions of Americans remaining unemployed," said Republican Party chief Michael Steele. "The stimulus was an economic experiment that failed Americans."

More job cuts were announced this week. Washington-based manufacturer Danaher Corp. said it will lay off about 3,300 of its roughly 50,000 employees, an increase from the 1,700 cuts it announced in the spring. American Airlines said it is cutting 921 flight attendant jobs as it deals with an ongoing downturn in traffic and lower revenue.

[TheMasses2002]

What a bunch of maroons ...............

[reveal5]

Talking heads on the left and right are now commonly using one word to describe the viewpoints of the far right fringe in America. That word is "INSANE." Y'all retired Republican seniors had about 3 weeks when you got things stirred up. Now people are figuring y'all out. Narcissists, racists, folks who say every American has to stand on their own two feet while you folks are receiving three times what you have paid into Medicare. Fighting against socialism while it is the American taxpayer that is paying the majority of your medical bills. Republican seniors who seem to suffer from generational narcissism. Republican seniors who do not care about the suffering and dying in America. Yea, you folks had your 15 minutes of fame. The rest of America learned quite a lot about you retired Republicans. Thanks for the lesson.

[the74blaster]

I am amazed at how many GOP supporters are trying to convince us that the record deficits and the high unemployment are Obama' fault.

However, lets consider some facts.

1. The 2009 budget was authored in 2008 by the congress and approved by President Bush.

2. The economy bottomed out on Marh 4, 2009 and unempoyment ussually lags this by appoximately 10 months.

3. The creation of derivatives and other gambling ventures specifically oil futures caused the collapse when the economy could no longer sustain $ 4.30 per galon for gas.

Based on this the causes of this recession occured long before Obama was in office,so blaming him is the height of stupidity when the facts state otherwise.

If we are truely cncerned about unemployment, why do we continue to champion free trade when it has resulted in offshore exportation of our manufacturing jobs?

If th GOP supporters want to blame someone for the high unemployment or thi recession, you need to start with the treasonous policies that the GOP pushed in the name of free trade.

[presjfk]

Our economy is so dependent on Wall Street that the President and his VP must "talk up" the economy because the investors that control our economy make their decisions on many factors but mostly on, "feelings". This means that the performance of our economy is in part a self-fulfilling prophecy depending on what people in power are saying and how investors feel.

So for those of you condemning Obama and Biden for talking up the economy, what would you have them do? Say the economy is dying and will get worse? That would be a stupid thing to do and would intensify our problems.

Besides, who really knows anything, anyway? Nobody knows if the economy will get better or worse, it is all guessing. Being optimistic is the best option.

[Benton09]

You're right, the stock market is just like a casino. A gamble. You just don't know.

[j_masters54]

Wow I'm glad I'm still saving like I have been. You just never know these days if you're going to be next in line. I really think people need to be getting as creative as possible when it comes to saving. I've been getting free things from http://www.TheGuiltFreeShop.com in order to save a few extra dollars each month. Recently they have even had ways for me to earn a few extra dollars

[TheMasses2002]

I've been unemployed before.
It's not a good thing.
It's UNgood.

[jackp32]

16.8% is the real unemployment rate as the U.S. recession and financial stability come tumbling down. This is real change you can believe in. Like the bumper sticker said "don't blame me, I voted for the other guy". Sadly, most of the lost manufacturing jobs are gone forever. As companies expand someday, new manufacturing jobs will be added in foreign countries. At some point soon, State and local governments will have to initiate mass layoffs. If this happens, can a depression be in the cards as the Oh!Bama administration collapses under a deluge of debt and administrative failures. It's time for the politicians to try some other tactics besides passing legislation which lines their pockets and the pockets of their supporters.

[curse914]

Deregulation has been at the core of the GOP platform since its inception. Convince me it has not.

In the mean time, read this time-line of GOP deregulation and the resultant economic collapse. BTW, Clinton was a deregulation co-conspirator.

http://www.pbs.org/wgbh/pages/frontline/shows/wallstreet/weill/demise.html

[davidwyllie]

Joe Biden's comments about our economic 'progress' under Obama reminded me of a wife caught cheating who tells her husband, "Well, if it hadn't of been for me, it would have been MUCH worse. I had three offers that night, but I only accepted one of them!" The administration needs a better 'Spin Doctor'.

[ibsteve2u]

Until the Republican policies of inequitable free trade and "trickle-down" economics are corrected, my personal expectations for America's children are...bleak.

Unless they, too, can learn ot live on $250 a month like their counterparts in China.

I don't understand how the rightie commenters can support the GOP...inequitable free trade was the biggest sellout of a nation's workers/consumers/soldiers (remember, they're the same people) in human history.

[ibsteve2u]

Good question, whymayiask, good question...

[ibsteve2u]

lollll...maybe I should have said exactly what the CNBC talking head just said - what they all say: "...nobody wants a trade war...".

The forces - both those who are getting vastly richer by exploiting the artificial inequities in the cost of production nation-to-nation and those who do not want to "offend" other nations - aligned against the American worker/consumer/soldier are huge...and monstrous.

[doc_holliday76]

by notblue:
"stn_sage, the Democrats had the MAJORITY in both houses the last two years of Bush's final term, why is it you are not aware of this fact?"
---------------------------------



Maybe so, but you're forgetting the biggest FACT, and that is that the moronic republican'ts used record numbers of fillibusters to kill record numbers of all bills passed by the House. Never before in our history, have we ever seen record numbers of fillibusters by the GOP to require everything in the Senate to have 60 votes to continue.

Actually, even Our Constitution states that a majority in both houses of Congress is all that is required to pass legislation -- not the 60 votes in the Senate that the GOP is requiring now!