Employers added a disappointing 96,000 nonfarm jobs in August and the unemployment rate fell to 8.1% from July's 8.3% as the size of the workforce continued to drop, according to a Labor Department report Friday.
The highly anticipated report could shape voters' views of the economy as the presidential election draws near.
The private sector added 103,000 jobs despite a loss of 13,000 manufacturing jobs. Federal, state and local governments cut 7,000 jobs. Job gains were strongest in food services and bars, professional and technical services, and health care.
Economists' consensus forecast had expected nonfarm job gains of 127,000, including 138,000 in the private sector, and 11,000 government losses.
Employment figures for June and July were revised down with a total of 41,000 fewer jobs created in those two months.
Since the start of 2012, job growth has averaged 139,000 per month compared to an average monthly gain of 153,000 last year.
Payrolls
In the past four months, job growth averaged 95,000 a month compared to an average monthly gain of 225,000 in the first quarter of the year. In July, job creation strengthened, suggesting that the labor market may be returning to normal after a warmer-than-usual winter pulled forward economic activity to early in the year, damping growth in the spring, says Nigel Gault, chief U.S. economist of IHS Global Insight.
Federal Reserve Chairman Ben Bernanke said last week that the economy "is far from satisfactory." A still-weak housing market has begun to rebound and consumer spending has picked up. But manufacturing output has slowed substantially in recent months, and consumer confidence has fallen.
Economists have attributed the recovery's half-speed pace in part to the eurozone's recession and ongoing financial crisis, which is hampering U.S. exports. Also, many businesses are nervous about whether a divided Congress will find a way to avert the impact of large spending cuts and tax increases scheduled to kick in at year's end. Fears that Congress will remain gridlocked has prompted some firms to put off investment and hiring. And rising gasoline prices are expected to prompt consumers to curtail spending.
Friday's jobs report could be influential in Fed policymakers' discussions next week about whether the central bank should buy more Treasury or government mortgage-backed bonds in a bid to further push down long-term interest rates. Doing that could encourage more purchases of homes, cars and factory equipment. Some economists expect the Fed to take the more modest step of tentatively committing to keep short-term interest rates near zero until at least 2015. The plan now extends to at least late 2014.
USA Today