US Unemployment Edges Down To 7.3 Percent, A New Low For Recovery

The U.S. unemployment rate edged down from 7.39 percent in July to 7.28 percent in August, according to data released today by the Bureau of Labor Statistics. The decrease did not, however, reflect an across-the-board strengthening of the labor market. According to the BLS household survey, the civilian labor force, the number of unemployed, and the number of employed all decreased slightly for the month, both before and after seasonal adjustment. The labor force participation rate and the employment-population ratio also decreased on the month.

The BLS also publishes data on a broader measure of unemployment and undermployment known as U-6. That measure takes into account people who are working part-time but would prefer full-time work, and so-called marginally attached workers. The latter incude people who have not looked for work because they think none is available and people who would like a job and are available for work, but who did not look for work in the previous four weeks because of study, family responsibilities, or other reasons. Both involuntary part-time workers and marginally attached workers decreased for the month, bringing U-6 to 13.7 percent. As the next chart shows, that also was a new low for the recovery.

According to the separate survey of business establishments, the number of payroll jobs grew by 169,000 during August. The establishment survey excludes farm workers and the self-employed, does not correct for workers holding two jobs, and differs in other details of methodology. It is not unusual for the household employment data and the payroll jobs data to point in opposite directions. Previously reported payroll jobs gains for June and July were revised downward by a total of 74,000 for the two months. As the next chart shows, the August job growth was slightly below the average of 184,000 per month of the preceding year.

Most of the new payroll jobs were in the service sector, with retail trade, professional and business services, and healthcare showing some of the strongest gains. Manufacturing showed a small increase in jobs while construction was flat. Government employment gained, largely on growth of local government education. Federal government employment was unchanged.

Not too much can be read into any one month’s jobs numbers. The surveys on which they are based are subject to sampling error and later revisions. Considering these caveats, the August employment situation is consistent with pattern of the past two years—slow but steady growth with a considerable distance to go before the economy reaches anything that we could reasonably describe as “full employment.”

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