Just 96,000 American jobs were added in August in a bleak monthly jobs report as 368,000 left the workforce, bringing labour market participation down to its lowest level for 31 years and dealing a blow to President Barack Obama’s re-election chances.
The national unemployment rate dropped to 8.1 per cent, down from 8.2 per cent, but this was only because so many people gave up looking for work. If the participation rate had not dropped so precipitously, unemployment would have risen to 8.4 per cent.
Factory employment fell by the most in two years and temporary-help companies eliminated positions for the first time in five months. The 69.9 per cent labor force participation rate for men is at lowest level recorded since the US government began tracking it in 1948.
According to James Pethokoukis of the American Enterprise Institute, the unemployment rate would be 11.2 per cent if the labour force participation rate had remained what it was when Obama took office in January 2009. The U.S. Labour Department also said that 41,000 fewer jobs were created in June and July than previously reported.
President Barack Obama was made aware of the figures before he took the stage to deliver his prime-time address at the Democratic convention on Thursday night, which could account for his sometimes grim demeanour as he spoke.
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