Unemployment Rate Unchanged at 9.1%
For the first time since 1945, the US government has reported a net monthly job change of zero. This number was lower than expectations and raises the very real possibility of: a) another recession and b) QE3.
The national unemployment rate was unchanged at 9.1% in August. Here is how the unemployment rate has looked so far in 2011:
January 2011 - 9%
February 2011 - 8.9%
March 2011 - 8.8%
April 2011 - 9%
May 2011 - 9.1%
June 2011 - 9.2%
July 2011 - 9.1%
August 2011 - 9.1%
The August payrolls report was the weakest since September of 2010. On top of that, nonfarm employment was revised lower for June and July to show nearly 60,000 less jobs.
Recently released data would seem to strongly indicate that the US is likely to experience another recession. Here is what Harvard University economic professor Martin Feldstein (who is a member of Obama's Economic Recovery Advisory Board) had to say:
"The numbers that we've seen recently for the U.S. on manufacturing, on construction, on consumers' sentiment tell me that the odds have gotten much greater that the U.S. is going to continue to decline and that we are going to be in a formal recession before the end of the year."
Friday's job number also makes it even more likely that the Federal Reserve will introduce a third round of Quantitative Easing (QE3) in order to try and boost the sagging US economy.
The US economy is currently trapped in a vicious circle right now.
Companies aren't hiring due to weak consumer demand, despite the fact that they are sitting on record piles of cash. They'd rather wait until they see some sort of an uptick in demand before they start putting this cash to work.
Consumers aren't spending due to a multitude of different reasons, including a weak employment market, rising food and energy prices and a weak housing market. Many consumers just aren't flush with cash right now, and this is translating into weaker demand as many people are being forced to cut back on their expenditures.
Some of the other notable data from today's report:
-14.0 million unemployed persons in August
-8.9% unemployment rate of adult men, 8.0% unemployment rate for adult women
-25.4% unemployment rate for teenagers
-long-term unemployed (those jobless for 27 weeks and over) at 6.0 million
-civilian labor force participation rate 64.0%
-employment-population ratio at 58.2%
-total nonfarm payroll employment for June revised from +46,000 to +20,000, July numbers revised from +117,000 to +85,000
-U-6 unemployment rate in August was 16.2%
-August hourly earnings fell by 3 cents to $23.09
Filed under: The Economic Meltdown