US creates no jobs in August

A job seeker fills out an employment application at
an outdoor job fair in Los Angeles this week
© AFP Robyn Beck

WASHINGTON (AFP) – The struggling US economy added no jobs in August after 10 months of gains, amid rising fears of recession and political turmoil over the government’s debt and deficit, official data showed Friday.

Employment in the private sector, which has been the main engine for job growth as revenue-strapped governments shed workers, “changed little” in most major industries, the Labor Department said.

The total of 17,000 private-sector jobs added were offset by 17,000 shed by government.

The Labor Department said the unemployment rate remained unchanged at 9.1 percent from July. It was the 28th month the jobless rate has been at 9.0 percent and above, except for two.

The number of unemployed people was essentially unchanged, at 14 million.

The jobs data for August were the worst since September 2010, when the economy destroyed more than twice the number of jobs it created.

The report comes amid political gridlock in Washington, as President Barack Obama’s Democrats and their Republican foes battle over how to achieve long-term deficit reduction.

It also comes ahead of Obama’s speech to a joint session of Congress next Thursday, in which he will lay out a plan to create jobs and stimulate the moribund economy, whose growth fell below one percent in the first half of the year.

After a series of weak economic data, analysts had lowered their expectations for August nonfarm job growth. The average estimate was for a net 70,000 payrolls, with the jobless rate holding steady.

The department sharply lowered its July reading for payrolls, to 85,000, from an initial estimate of 117,000.

A monthly job growth pace of 100,000 is seen as necessary to support a steady unemployment rate, according to Briefing.com economists.

Still adding jobs was the health-care sector, by 30,000, mining and professional and business services.

A decline in information employment reflected a strike in the telecommmunications industry, the department said, referring to a two-week strike against Verizon Communications by about 45,000 employees.

Governments continued to shed jobs, even after accounting for about 22,000 workers from a partial state government shutdown in Minnesota, the department said.

Since employment peaked in September 2008, local governments have shed 550,000 jobs.