94,391,000 Not In Labor Force; Labor Force Participation Stuck at 62.8%

Susan Jones | September 2, 2016 | 8:43am EDT
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In this Wednesday, Aug. 31, 2016, photo, a worker at the C.C. Filson Co. manufacturing facility in Seattle works at a sewing machine. U.S. manufacturing contracted in August for the first time since February, as new orders and output plummeted and factories cut jobs, according to information released Thursday; and on Friday, the August employment numbers came out. (AP Photo/Ted S. Warren)

(CNSNews.com) - Following Thursday's report of manufacturing weakness, the Obama administration on Friday released the August employment numbers, showing little or no improvement from the prior month.

94,391,000 Americans were not in the labor force in August, 58,000 more than July's 94,333,000; and the labor force participation rate was stuck at 62.8 percent, just where it was in July, the Labor Department's Bureau of Labor Statistics reported on Friday.

It was one year ago, in September 2015, that the labor force participation rate dropped to 62.4 percent, its lowest point since 1977. (The best it’s been since Barack Obama took office is 65.8 percent in February 2009, the month after Obama was sworn in amid a recession.)

The labor force participation rate is the percentage of people in the civilian noninstitutionalized population, age 16 or older, who are either working or actively seeking work. People who are no longer looking for work, for whatever reason -- retirement, school, family, or they've just given up -- are not participating in the labor force.

In Friday’s report, BLS said the economy added 151,000 jobs in August, not as much as analysts expected. That compares with an average monthly gain of 204,000 over the prior 12 months. (The change in total nonfarm payroll employment for June was revised down from +292,000 to +271,000, and the change for July was revised up from +255,000 to +275,000. Combined, employment gains in June and July were 1,000 less than previously reported.)

The August unemployment rate held steady at 4.9 percent, as the number of unemployed persons increased 79,000 to 7,849,000.  At the same time, the number of employed persons increased 97,000 to 151,614,000 in July.

The August numbers are being closely watched by economists as an indication of whether the Federal Reserve might raise interest rates later this month. Weak number suggest it will not, and given Friday’s lackluster report, most analysts don't expect a rate hike until December.

Before the monthly report on U.S. employment was released on Friday morning, analysts were predicting the addition of 180,000 new jobs and a downward tick in the unemployment rate to 4.8 percent from 4.9 percent.

In August, the nation’s civilian noninstitutionalized population, consisting of all people 16 or older who were not in the military or an institution, reached 253,854,000. Of those, 159,463,000 participated in the labor force by either holding a job or actively seeking one.

The 159,463,000 who participated in the labor force equaled 62.8 percent of the 253,854,000 civilian noninstitutionalized population.

A report released Thursday said U.S. manufacturing contracted last month for the first time since February, as new orders and output plummeted and factories cut jobs.

The Institute for Supply Management said Thursday that its manufacturing index dropped to 49.4 in August from 52.6 in July. Any reading below 50 signals contraction.

The report suggests that manufacturers continue to struggle as businesses spend less on machinery, computers and other large equipment. Auto sales have also leveled off this year after reaching a record level in 2015.

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