August Jobs Report Labors for Silver Lining

The true unemployment rate is 19 percent.Is there a silver lining in the latest jobs report? Most analysts say “no.” Released Friday, the latest jobs report from the U.S. Department of Labor shows a slight drop in the national unemployment rate from 8.3 to 8.1 percent. On the surface, the change seems like a sign of an improvement in the economy. Conceivably, the drop in the rate suggests more jobs were created and more Americans have found jobs since July. According to most analysts, though, this assumption is false.

The report states that 96,000 jobs were added in August. Analysts expected the number to be at least 125,000. Also, by comparison, the monthly average for jobs created in 2012 is 139,000, which is still considered extremely low.

In his article this weekend in the Wall Street Journal (WSJ), Mort Zuckerman argues the unemployment rate ticked down in August because more people are looking for jobs, not because more jobs were created.

“The numbers for August,”

he writes,

“reflect only people who have actively applied for a job in the past four weeks, either by interview or filling (out) an application form.”

He goes on to explain that the number of people who are out of work, but not counted because they haven’t sought work in the past four weeks, is approximately eight million. Zuckerman says these are the people who have stopped looking for work due to discouragement. He also says the nation is five million payrolls shy of where the country was at the end of 2007, when the recession began. Zuckerman says the true unemployment rate is 19 percent

Conor Dougherty and Damien Paletta corroborate Zuckerman’s statement in their article this weekend. They say the rate ticked down for the wrong reason.

“The jobless rate,”

they write,

“based on a separate survey from the main job tally fell as people gave up searching and left the workforce, not because they found positions.”

Dougherty and Paletta also assert that last week’s jobs report raises the possibility of the Federal Reserve launching steps to spur the economy with a new bond-buying program at the end of its policy meeting in the coming week.

The Georgia Department of Labor (GDOL) has yet to release the unemployment numbers for August. The July rates, however, were not encouraging. Georgia’s unemployment rate for July was 9.3, Gilmer County was 10.5, Fannin 10.1, and Pickens was 8.2. GDOL is expected to release the August job numbers by next week.