There were 54,000 fewer employed people in the United States after the month of July. The change was driven by more than 100,000 temporary census workers completing their tasks and and being let go, while private hiring ticked upward to 67,000 new jobs. The unemployment rate remains the same at 9.6 percent, while the all-important "U-6" number -- comprising everyone who lost their job, lost hours, or has been discouraged from finding a job -- rose slightly to 16.7 percent.
While the increasing growth in private hiring is a good sign, it's clear that the economy is underperforming. We'd at least like to see jobs increase by at least 120,000 a month -- that's what's needed to keep up with population growth -- and ideally by around 245,000 a month or more, the number it will take to bring unemployment down one percentage point a year.
If the economy were a car, it would probably be sputtering. Next month we can probably expect a positive jobs report, since we ought to be finished with the periodic layoffs of temporary census workers, but it's unclear both where growth will come from and whether it will be enough to keep jobs growing at anywhere near the rate we need to return to pre-crisis levels of employment. We're not (yet) in a double-dip recession, since growth is there, but perhaps that's something of a curse. Were we certifiably back in a decline, policy-makers would be forced to take action. But since we're caught in a limbo state of growth so weak it feels like a decline, policy-makers tend to take a wait-and-see approach rather than attacking the problem head on.
-- Tim Fernholz
