AP Economics Writer
POSTED: 04:16 a.m. HST, Sep 07, 2012
LAST UPDATED: 08:28 a.m. HST, Sep 07, 2012
WASHINGTON » U.S. employers added 96,000 jobs last month, a weak figure that could slow the momentum President Barack Obama hoped to gain from his speech Thursday night to the Democratic National Convention.
The unemployment rate fell to 8.1 percent from 8.3 percent in July. But that was only because more people gave up looking for jobs. People who are out of work are counted as unemployed only if they're looking for a job.
The government also said Friday that 41,000 fewer jobs were created in July and June than first estimated. The economy has added just 139,000 jobs a month since the start of the year, below 2011's average of 153,000.
Dow Jones industrial futures, which had been up before the report, fell soon after it was released but then bounced back. And the yield on the benchmark 10-year Treasury note tumbled to 1.63 percent, from 1.73 percent. That suggested that investors see a slow economy resulting in more demand for low-risk investments like U.S. Treasurys.
Friday's report was discouraging throughout. Hourly pay fell, manufacturers cut the most jobs in two years and the number of people in the work force dropped to its lowest level in 31 years.
The sluggish figures make the Federal Reserve more likely to unveil a new bond-buying program at its meeting next week to try to lift the economy, said John Silvia, chief economist at Wells Fargo. The goal of the bond purchases would be to lower long-term interest rates to encourage borrowing and spending.
"This weak jobs report is going to feed into their argument that the economy is growing at a sub-par pace," Silvia said.
The report provided fodder for both presidential candidates. Soon after the report was issued, Republican nominee Mitt Romney pointed to 43 straight months in which unemployment has now exceeded 8 percent.
"President Obama just hasn't lived up to his promises, and his policies haven't worked," Romney said in a statement.
At the same time, the report marks the 30th straight month of private-sector job gains, a point Obama and his allies are certain to spotlight.
Friday's jobs report is among the most politically consequential of the campaign. The figures arrive as the presidential race enters the final two months before Election Day. Jobs are the core issue, and the report could sway some undecided voters.
There will be two additional employment reports before the election. But by then, more Americans will have made up their minds.
In his speech Thursday night, Obama acknowledged incomplete progress in repairing the still-struggling economy and asked voters to remain patient.
"The truth is, it will take more than a few years for us to solve challenges that have built up over the decades," Obama said.
Jim O'Sullivan, chief U.S. economist at High Frequency Economics, noted that hiring has improved slightly in the past two months. Job gains averaged 119,000 in July and August, up from an average monthly gain of 67,000 in the April-June quarter.
"There's no sign of momentum fading," he said. "That said, it's not much better. ... What you're left with is an economy that's still growing, but pretty modestly."