Podcast: The August Employment Report and What It Means for the Economy
I’m Michelle Bazie and I’m here with Chad Stone, the Center’s Chief Economist to discuss the employment report for August.
1. Chad, what did we learn from today’s jobs report?
We learned that private employers are adding jobs a little faster than we thought, but mostly we learned what we already knew: the economic recovery is still struggling to gain traction and we aren’t creating enough jobs to bring down the unemployment rate.
Total employment fell by 54,000 jobs in August. That’s mainly due to the scheduled reduction in temporary Census jobs, which took 114,000 jobs off the federal government’s payroll. People were expecting almost no growth in private payrolls, but in fact private employers added 67,000 jobs – that offset a significant amount of the loss in government jobs.
2. Haven’t we had eight straight months of private sector job growth this year?
We have, and that’s the good news. Unfortunately, we’ve only added an average of 95,000 jobs a month to private payrolls this year, and that’s barely enough to keep up with population growth. We’re still down almost 8 million jobs from where we were at the start of the recession and we are going to need much faster growth to dig out of that hole and put the people who lost their jobs in the recession back to work.
3. So, what did happen to the unemployment rate in August? What is it?
The unemployment rate edged up from 9.5 percent to 9.6 percent. There’s a bit of a silver lining here. People came back into the labor force looking for work in August after four straight months of declining labor force participation. Now, not everyone found a job immediately, and some who were looking for full-time work had to settle for a part-time job. In fact the labor department’s most comprehensive alternative unemployment rate measure rose to 16.7 percent in August. That’s a measure that includes people working part time because they can’t find a full time job and people discouraged from looking for a job.
4. What does today’s jobs report tell us about the need for further economic stimulus?
The economic recovery could definitely use a boost to stimulate more demand for goods and services and to put people back to work. 14.9 million people are unemployed and over 40 percent of them have been looking for work for more than six months. Federal Reserve Chairman Bernanke said in a speech last week that the Fed has tools to provide more monetary stimulus and President Obama said today he will be proposing new job-creating fiscal stimulus measures. We need both and we need them soon.
Thanks for joining me, Chad.