Reporting Tim Kephart
MIAMI (CBSMiami) – The U.S. economy only added 96,000 jobs in August, according to the Bureau of Labor Statistics, but those numbers were less than the more than 100,000 economists were expecting.
Still, the overall unemployment rate ticked down to 8.1 percent in August, but that was aided by more than 300,000 people leaving the workforce. All of it cast a dark cloud over President Obama after a well-received Democratic National Convention.
The jobs numbers illustrated a still struggling recovery from the deepest financial hole the country has seen since the Great Depression in the 1930’s. One notable fact is that from roughly March 2009, when the stimulus kicked in, the economy has added several million jobs.
But, depending on how you calculate the metric for job creation for a candidate, whether you count from the first day in office or from roughly 90 days in office when the new president’s economic policies kick in, President Obama has either seen a net loss in jobs, or a relative increase in jobs.
Overall, the private sector added 103,000 jobs in August, but that was offset by 7,000 government job losses. The shrinking public sector, a hallmark of the Republican ideology, has contributed to keeping the unemployment rate unusually high during the recovery.
Economists have estimated that reversing many of the jobs lost in government could lower the unemployment rate by more than 1 percent. Obama and his opponent, Mitt Romney, are watching the unemployment rate closely to use for their campaign.
Romney’s campaign is saying the recovery is too slow and that he could increase the speed of it by giving more tax cuts to wealthy Americans and businesses and loosening business regulations. Obama’s campaign counters some tax increases are necessary for the wealthy and that while slow, all economists predict more than 12 million jobs will be created over the next four years.
The struggles of the labor market also increased the beliefs among economists and Wall Street that the Federal Reserve will take more action to, in the form of bond buybacks and other asset purchases, to help spur economic growth.
Part of the struggles of the labor market also centers on the fiscal cliff that is awaiting the country at the end of the year. Both parties want to keep the Bush tax cuts in place for those making under $250,000. But, Republicans want them extended for all Americans, while Democrats want them to stop at $250,000.
In addition, both parties must agree on how to avoid deep spending cuts to defense and other programs agreed to by leaders of both parties last year during the debacle of raising the national debt that saw the nation’s credit rating downgraded.
But, neither party will address those problems in a meaningful way until after the November election for fear of losing their seat in the election if they fall on the wrong side of the argument.
All of it leaves the labor market and millions of unemployed Americans hanging in limbo in the meantime.