According to the Department of Labor data, job growth is slowing in the U.S. The latest jobs report showed 169,000 jobs were added in August, with unemployment falling to 7.3 percent.
Economists were expecting a gain of 180,000 jobs, according to a Bloomberg survey. The expected unemployment rate was forecast to stay at 7.4 percent. In a report released Thursday, the Labor Department reported that the number of Americans applying for unemployment benefits is near a five-year low. The economy needs at least 200,000 new jobs a month just to keep pace with population growth.
In July, the Bureau of Labor Statistics reported the economy added 162,000 jobs. This figure was revised sharply downward to 104,000. Its reported figure of 188,000 in June was also revised down to 172,000.
Additionally, the gap between educated workers and less-educated workers is growing. The unemployment rate for college graduates is at 3.5 percent while the rate is 11.3 percent for high school dropouts.
This loss of momentum for the job market may reflect a weak labor market with the participation rate falling by 1.6 percent since January 2010. Only 63.2% of Americans now participate in the labor force -- meaning they have a job or are looking for one. This is the lowest rate since August 1978.Some of this can be attributed to an aging labor force, but still points to workers leaving the labor force.
The health of the job market is being closely watched as the Federal Reserve has indicated that it will begin tapering its bond-buying program with an improving economy, and plans to end the monthly purchases when unemployment hits 7.0 percent. The jobs report is not likely to change the consensus that the Fed will begin tapering later this month. Other recent data, such as auto sales reaching post-recession highs, indicates the employment report for August is unlikely to change the Fed’s move toward a gradual exit from its stimulus.