Job Growth Shows Little Improvement in August
Federal Reserve Chairman Ben Bernanke described the labor market’s stagnation as a “grave concern” a week ago, raising expectations among economists that the U.S. central bank would pump more money into the sluggish economy at its September 12-13 meeting.
According to Reuters survey of economists, U.S. employers are expected to have increased payrolls by 125,000 workers last month, a step down from July’s 163,000-job gain. The unemployment rate is holding steady at 8.3 percent. The U.S. economy grew at an average annual pace of 1.8 percent over the first half of this year.
According to Reuters economists, a sustained growth rate of about 2.5 percent or higher for several quarters would be required to significantly reduce unemployment.
U.S. hiring has tapered off from 226,000 to an average of 105,000 per month since June.
Harm Bandholz, chief U.S. economist at UniCredit Research in New York, told Reuters that Europe’s long-running debt problems have led businesses to postpone investment decisions and were likely weighing on hiring as well.
“Companies are delaying all that stuff given the uncertainty about the fiscal cliff and the global economy. They don’t want to add too much to their books, neither capital nor workers,” he said.
Factory employment fell to its lowest level since November 2009, signs the labor market continues to struggle.
U.S. Labor Department data shows that the number of Americans out of work for 27 weeks or longer in July was 1.5 million fewer than the April 2010 peak. The Department will release August employment data September 7.