The August jobs report came in weaker than analysts expected. The Bureau of Labor Statistics showed that total non-farm employment only rose by 96,000 jobs in August, far less than the 125,000 economists predicted. The reduction in the unemployment rate was based on a decline of 250,000 people looking for work and a 368,000 reduction in the size of the labor force, reported the Wall Street Journal.
The drop in the labor force lowered the participation rate, the percent of the population working or looking for work, to 63.5%—the lowest number since women began entering the labor force. Drilling down into the data revealed that 12.5 million people are unemployed, 5 million of whom have been unemployed for 27 weeks or more.
While unemployment rates vary widely across the major work demographic groups, they remained little changed from August 2011. The unemployment rate for teenagers (24.6%), blacks (14.1%), Hispanics (10.2%) is considerably higher than the rate for whites (7.2%), Asians (5.9%), and the general rates for adult men (7.6%) and adult women (7.3%). The employment-population ratio remained at 58.3%.
The headline grabbing news of the unemployment rate overshadowed news that initial claims for state unemployment benefits dropped by 12,000 to 365,000. Reuters reported that it was the first drop in new claim numbers since the week of August 4, and was also the lowest level since then. However, the four week average of new claim numbers moved up to 371,250.