Yet another feather this president can put into his hat
WASHINGTON — Employment growth ground to a halt in August, as sagging consumer confidence discouraged already skittish U.S. businesses from hiring, keeping pressure on the Federal Reserve to provide more monetary stimulus to aid the struggling economy.
Nonfarm payrolls were unchanged last month, the Labor Department said Friday.
It was the first time since 1945 that the government has reported a net monthly job change of zero. The August payrolls report was the worst since September 2010, while nonfarm employment for June and July was revised to show 58,000 fewer jobs.
“The bottom line is this is bad,” Diane Swonk, chief economist with financial services firm Mesirow Financial, told CNBC Friday.
Despite the lack of employment growth, the jobless rate held steady at 9.1 percent in August. The unemployment rate is derived from a separate survey of households, which showed an increase in employment and a tick up in the labor force participation rate.
While the jobs report underscored the frail state of the economy, the hiring slowdown probably will not be seen as a recession signal as layoffs are not rising that much.
A strike by about 45,000 Verizon Communications workers helped push employment in the information services down by 48,000. Allowing for the decline from the Verizon strike, private payrolls would have risen by 62,000.
A rough month
"August was a pretty rough month for the economy," said Ryan Sweet, a senior economist at Moody's Analytics in West Chester, Pa. "We saw financial markets tighten. I think businesses sort of responded by putting hiring on the back burner," he said before the release of the report.
An acrimonious political fight over U.S. debt, which culminated in the downgrade of the country's AAA credit rating from Standard & Poor's, and a worsening debt crisis in Europe ignited a massive stock market sell-off last month and sent business and consumer confidence tumbling.
With the unemployment rate stuck above 9 percent and confidence collapsing, President Barack Obama is under pressure to come up with ways to spur job creation. The health of the labor market could determine whether he wins a second term in next year's elections.
Obama will lay out a new jobs plan in a speech to the nation next Thursday.
“The economy is slowly grinding to a halt,” said Steve Blitz, senior economist for ITG in New York. “The problem, however, on the policy side is that I wonder whether the numbers are truly weak enough to galvanize a political response.”
Starting to makle Carter look good
