August 2014 Jobs Report

Unemployment Rate: 6.1 percent

Unemployed Americans: 9.6 million

 Employment and Unemployment

1. The Department of Labor reported an unemployment rate of 6.1 percent for August 2014, a decrease of 0.1 percentage point. It reported an increase of 142,000 nonfarm jobs over last month. Employment for June was revised down from 298,000 to 267,000 jobs created, and July was revised up from 209,000 to 212,000.   
2. Economists surveyed by the Wall Street Journal had anticipated job growth of 225,000. Today’s job creation figure is much smaller than the average monthly gain of 212,000 over the prior 12 months.
3. The number of unemployed people in August was 9.6 million, a slight decrease from last month’s figure of 9.7 million.
4. The “real” number of unemployed Americans is 19.0 million. These are people who are unemployed (9.6 million), want work but have stopped searching for a job (2.1 million), or are working part time because they cannot find full time employment (7.3 million).
5. In August, there were 2.1 million discouraged workers. Among these workers are 775,000 who have stopped looking for employment, believing no work is available. This is up from 741,000 last month. 
6. The “real” unemployment or U-6 rate is 12.0 percent, down 0.2 percentage point from July. This is the total percentage of unemployed and underemployed workers.
7. In August, employment grew by 47,000 in professional and business services; 34,000 in health care; 20,000 in construction; and was unchanged in manufacturing. Employment in retail trade decreased by 8,000; and decreased by 4,000 in state government, excluding education.   

Labor Force Participation

1. The labor force participation rate is 62.8 percent, down 0.1 percentage point from the previous two months and remaining near the lowest level in 36 years. Labor force participation is down 0.5 percentage point year over year. 
2. If the labor force participation rate were the same as when President Obama took office, the unemployment rate would be 10.2 percent.
3. The share of American adults with jobs in August was 59.0 percent, an increase of 0.3 percentage point over the year, and little changed for the last five months. This is more than four percentage points below its pre-recession peak. 
4. The number of long-term unemployed (those unemployed for 27 weeks or longer) is 3.0 million Americans. This represents 31.2 percent of unemployed people. During the 1980s, when our country faced a similar recessionary period, the proportion of long-term unemployed never exceeded 27 percent. 
5. Federal Reserve Chair Janet Yellen has raised concern with the consistent number of Americans working part time for economic reasons – because they cannot find a full-time position or their hours have been cut back. Today’s report shows this figure to be 7.3 million, little changed from last month. 
6. Also of concern to economists is the stagnant growth in wages. Average hourly earnings for all employees on private nonfarm payrolls rose by six cents to $24.53. Average hourly earnings have risen by 2.1 percent year-over-year. August was the 61st straight month that year-over-year hourly wage growth has been below 2.5 percent. Prior to the recession, wage growth routinely exceeded three percent.