Doldrums continue as jobless rate falls to 7.3 percent

Posted: September 08, 2013

Doldrums continued in the U.S. labor market in August with the nation's payrolls adding 169,000 jobs - not enough, or fast enough, to move the needle much for the nation's 4.3 million long-term unemployed.

The unemployment rate declined slightly to 7.3 percent, the lowest rate in nearly five years, the U.S. Labor Department reported Friday.

"The drop in the employment rate is bogus," said Ryan Sweet, an economist with Moody's Analytics in West Chester. "It's attributable to people - teenagers and older people - leaving the labor force."

The civilian labor force declined by 312,000 people in August. Those are people who are not working and not looking for work, perhaps because they are discouraged about job prospects.

"The number of people who dropped out of the labor force is twice the number of new jobs - that's a big statistic. It shows you how bad things are, particularly for the people who are long-term unemployed," said management professor Peter Cappelli at the University of Pennsylvania's Wharton School.

The ho-hum jobs report - the last the Federal Reserve will see before it decides whether to reduce bond purchases this month - may have prompted a midmorning decline on Wall Street. Trading recovered later in the day and markets ended mixed.

August reports tend to be tricky, Sweet said.

Though Labor Department numbers account for the seasonal swing that accompanies schools hiring teachers and teenagers quitting summer jobs, the algorithms aren't completely reliable.

"You want to take August swings with a grain of salt," Sweet said.

Adding to the doldrums were revisions in June and July payroll figures. Employment was revised downward by 74,000 jobs.

On the positive side, nearly every sector reported job growth. The only major declines were in the information sector, which includes movies and publishing, and in financial activities, including insurance and real estate.

Hiring was up in manufacturing, transportation, trade, retail, business and professional services, education, health and tourism. Government hiring also grew, with the growth in public education jobs at the local level offsetting state and federal declines.

Another positive is the decline in the number of people working part-time because their hours were cut or because of slack business conditions.

That's the statistic, but it doesn't feel that way to Howard White, 42, of New Castle, Del.

White, 42, was among hundreds of fast-food workers nationwide who walked off the job Aug. 29 to push for $15-an-hour pay instead of his pay, $7.25.

White is on the edge of homelessness, he said, staying with friends or cheap motels. He's lucky to work 21 hours a week.

"I have a 14-year-old daughter and sometimes I lie to her," he said. "Daddy just doesn't have the money for the things she wants. If I do [something for her], then what am I going to eat?"

On Friday at the King of Prussia office of Beyond.com, a national operator of job boards parsed by occupation and locality, James John, chief operating officer, weighed conflicting reports from his company's surveys, sales force, and job postings.

Nearly all - 91 percent - of the people taking a survey through Beyond.com's many websites are "confident" that they will be working in January. Even the unemployed feel that way, John said.

On the negative side, his sales crew is telling him that employers are advertising for employees and even interviewing them - but they end up not hiring.

"The war in Syria, the debt-ceiling fight, the impact of Obamacare that they still don't understand - fear and uncertainty is caused by these kinds of topics," John said.

However, he said, the websites catering to Philadelphia-area employers are doing well.

"Traffic is up. Employer registration is going well," he said. "I wouldn't put us in the lead engine or in the caboose."


Contact Jane Von Bergen at jvonbergen@phillynews.com, @JaneVonBergen on Twitter, or at 215-854-2769. Read her workplace blog at www.philly.com/jobbing.

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