Not A Good August 2013 Employment Report | AP: Lowest Participation Rate Since 1978

The Labor Department released its employment report for August 2013 this morning and though employers added jobs, most of the rest of the news was not good as the economy continues to struggle three years after then-Treasury Secretary Timothy Geithner declared, “Welcome to the Recovery.”

The AP reports, “U.S. employers added 169,000 jobs in August and much fewer in July than previously thought. The slowdown in hiring could complicate the Federal Reserve's decision later this month on whether to slow its bond purchases. The Labor Department says the unemployment rate dropped to 7.3 percent, the lowest in nearly five years. But it fell because more Americans stopped looking for work and were no longer counted as unemployed. The proportion of Americans working or looking for work fell to its lowest level in 35 years. July's job gains were just 104,000, the fewest in more than a year and down from the previous estimate of 162,000.”

The Washington Post’s prominent liberal blogger Ezra Klein agrees that the revisions are “a huge disappointment. ‘The change in total nonfarm payroll employment for June was revised from +188,000 to +172,000, and the change for July was revised from +162,000 to +104,000.’ That means we added 74,000 fewer jobs than we thought in June and July.”

Klein also writes, “The unemployment rate dropped for the worst reason. Unemployment dropped to 7.3 percent in August. Huzzah? Sorry, but no. There are two reasons the unemployment rate dropped. One is that people get jobs. Huzzah! The other is that people stop looking for jobs, and so they’re no longer counted as technically unemployed. That’s what happened here. The numbers show 312,000 people dropping out of the labor force. That’ll be revised, but if the truth is anywhere close, it’s horrible.”

Klein adds, “Unemployment among teenagers, African Americans and Hispanics remains insane. Among teenagers, the unemployment rate is 22.7 percent; for African Americans, it’s 13 percent; for Hispanics, 9.3 percent. And remember, those numbers only count people actively looking for work. Many others would like work but have stopping hunting. In these communities, then, the job market is somewhere between an awful recession and a severe depression.”

On Twitter, The Post’s Reid Wilson looked at the report and remarked, “Labor force participation rate lowest since August 1978.” The New York Times’s Economix blog elaborates: “Not a good morning for the employment report. The share of American adults with jobs fell slightly to 58.6 percent in August as population growth outpaced job growth. The United States is more than four years into a recovery so weak that this ‘employment rate’ has not recovered at all. As noted last month, 63 out of 100 adults had jobs before the recession. Now 59 do. The unemployment rate continues to decline because a growing share of the nonworking population is not even trying to find jobs.”

In another article, the AP explores the drop in the number of working Americans.  “The drop in the unemployment rate in August to a 4½-year low was hardly cause for celebration. The rate fell because more people stopped looking for work. More than 300,000 people stopped working or looking for a job. Their exodus shrank the so-called labor force participation rate — the percentage of adult Americans with a job or seeking one — to 63.2 percent. It's the lowest participation rate since August 1978. Once people without a job stop looking for one, the government no longer counts them as unemployed. That's why the unemployment rate dropped to 7.3 percent in August from 7.4 percent in July even though 115,000 fewer people said they had jobs. If those who left the labor force last month had still been looking for work, the unemployment rate would have risen to 7.5 percent in August. ‘Pretty disappointing,’ said Beth Ann Bovino, U.S. chief economist at Standard & Poor's Ratings Services. ‘You saw more people leave the job market and fewer people get jobs. Not a good sign.’ Back in 2000, the participation rate hit a high of 67.3 percent. . . . Craig Alexander, chief economist at TD Bank Group, says ‘demographics cannot explain the amount of decline’ in labor force participation. Many Americans without jobs remain so discouraged that they've given up on the job market. Others have retired early. Younger ones have enrolled in school. Some Americans have suspended their job hunt until the employment landscape brightens. A rising number are collecting disability checks. . . . Labor force participation for Americans ages 16 to 19 was just 34 percent last month. That's near their record low of 33.5 percent set last year. It isn't supposed to be this way. After a recession, a brightening economy is supposed to draw people back into the job market. But it hasn't happened. Labor force participation ‘certainly shouldn't be at current levels,’ Alexander says.”

The Patriot Post noted "At first blush, today’s jobs report once again seems to contain good news: 169,000 jobs added and unemployment dropping a tenth of a point to 7.3%, the lowest since December 2008. But beware what we call the “headline” numbers. The Left's media employs them to bolster the sorry record of their man in the White House. Digging deeper, we find trouble quickly. July numbers were revised down from 162,000 to just 104,000, and June was revised down for the second time. The unemployment rate fell once again only because so many people are giving up looking for work—312,000, or nearly twice the number who found work—and they aren't counted in the report. The labor participation rate fell to 63.2%, the lowest since Jimmy Carter’s malaise days of August 1978. If labor participation remained at the same level it was in January 2009, the headline unemployment rate would be 10.8%. It would be 7.7% if participation was the same as just one year ago."

As for the U-6 fuller measure, Hot Air’s Ed Morrissey observes that it "dropped from 14.0% to 13.7%, its lowest level in five years.” But, he warns, “[T]hat has to do with the shrinking workforce, too. In order to be counted in U-6, workers have to be at least marginally attached to the labor force. That’s defined as ‘those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months."

Meanwhile, Barack Obama and his crack shot economic team promised that if we just passed the “stimulus” unemployment would be 5% by now. Generation Opportunity reports "16% of Young People Out of Work in August.  "As the summer draws to a close, young people are no better off than we were three months ago. Practically all of the jobs created this summer were part-time, and precious few even went to young people. Worse, the looming threat of Obamacare offers employers little incentive to transition any of those jobs into full-time positions. Young people are recognizing there is little to like about Obamacare and a whole lot that hurts them financially and personally. Once open enrollment starts next month, I'm confident that millions of us are going to opt-out of the law's doomed-to-fail exchanges; unfortunately, we can't opt-out of the disastrous job market Obamacare has also created." The (U3) unemployment rate for 18-29 year old African-Americans is 21.6 percent."

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