The unemployment rate climbed to 9.6 percent as a result of many new entrants into the labor market (about half a million workers). This increase offset the July decline in the labor force, and it indicates that the weak July report was more statistical noise than a new downward trend.
Adult males accounted for two-thirds of these entrants, while the labor force participation rate for women remained flat. The problem is that only about half of these new entrants were able to find work, as private-sector jobs remain scarce. This is another rather anemic jobs report and indicative of the slow, painful climb to recovery.
There are two big bright spots: the average hours worked and temporary employment numbers. The average number of weekly hours worked climbed to 33.5 hours. That’s the highest level since October 2008, except for May of this year when the labor market was growing much more robustly. Last month, temporary services declined, which was worrying. This month’s report shows modest growth in temporary services and makes the July downturn seem like a statistical blip. These are both positive indicators that employment will continue expanding, albeit at this very modest pace.
The manufacturing sector had job losses for the first time this year, but construction increased hiring for one of the few months since the real estate collapse in 2007. As usual, most of the private-sector hiring was in health care, which accounted for twice as many new job opportunities as any other sector.
— Rea Hederman is senior policy analyst in the Heritage Foundation’s Center for Data Analysis.