According to the U.S. Bureau for Labor Statistics (BLS), the U.S. economy added 96,000 jobs in August. The U.S. unemployment rate fell to 8.1 percent from 8.3 percent – but only because more people gave up looking for work. The number does not bode well as President Obama bids for reelection in the face of a sluggish economic recovery.
The jobs figures for June and July were also lowered — down to 45,000 from 64,000 and to 141,000 from an initially estimated 163,000, respectively. The labor force participation rate fell to 63.5 percent in August, the lowest level since September 1981 and a major reason why the unemployment rate declined. Private payrolls increased by 103,000 as layoffs among state and local governments continued to offset gains in the private sector.
Mark Zandi, chief economist with Moody's Analytics, called the figures a "disappointment" and said an unexpected loss of manufacturing jobs skewed the numbers, sending them below 100,000.
Some of the reluctance among employers to expand their payrolls could stem from fears about the congressional lame-duck session after the election, which is loaded with tax and spending decisions that will have a huge impact on business.
"The greatest challenge to getting Americans back to work is the uncertainty facing our nation," said House majority leader, Rep. Eric Cantor (R-Va.).
The painfully slow growth of the labor market could spur the Federal Reserve to take action at its policy meeting this month. Fed Chairman Ben Bernanke said a week ago that the "stagnation of the labor market in particular is a grave concern" for the central bank.