News / USA

Weak US Employment Report Could Force Central Bank Action

People wait in line to meet with job counselor during a job fair at Workforce1 in New York, September 6, 2012.
People wait in line to meet with job counselor during a job fair at Workforce1 in New York, September 6, 2012.
VOA News
U.S. business analysts say that Friday's weak employment report could push the country's central bank to adopt new measures next week to spur job growth and boost the sluggish economy.

The government reported that the American labor market added only 96,000 new jobs in August.  While the jobless rate fell from 8.3 percent to 8.1 percent, that was largely because thousands of unemployed workers abandoned their search for a job.  As a result, they were not counted as part of the labor force and the declining unemployment rate.

Economist Steve Fazzari at Washington University in St. Louis said the meager job growth coupled with the reason for the declining jobless rate make it more likely the Federal Reserve will act to cut key long-term interest rates, which already are very low.

"With this relatively weak report, and I think that’s the way it's going to be interpreted, it makes it even more likely that the Fed will take some actions to lower long-term interest rates even further," said Fazzari.

Job growth has become a key point of contention in the close presidential election campaign between the Democratic incumbent, President Barack Obama, and his Republican challenger, Mitt Romney.  Fazzari said the lack of significant job growth is troubling.

"We're still stagnating," he said. "We're not creating enough jobs in the economy to even keep up with population growth.  So, yes, we are growing, rather than shrinking.  So that's a positive and that's certainly what the Obama campaign's going to emphasize.  But we're not really doing any kind of catch-up.  We lost so many jobs in 2008 and 2009, and we're just rumbling along the bottom, as far I'm concerned."

Another analyst, finance professor Rebel Cole at DePaul University in Chicago, emphasized that the drop in the unemployment rate is misleading.

"Unfortunately, most people are going to focus on the drop in the unemployment rate from 8.3 percent to 8.1 percent," said Cole. "And that’s unfortunate, because it’s badly misleading.  The unemployment rate fell because over 350,000 people dropped out of the labor force.  In other words, the situation is so bad that workers are simply giving up and leaving the labor force.  Since last year at this time, about 2.7 million workers have lost faith and left the labor force.  So that has masked the true unemployment rate, which would be closer to double digits were those people still counted."

Cole said he is not sure that the Federal Reserve will adopt new policies next week, but said that with the poor employment report, the "probability just went way up."

Cole said the central bank has signaled that it might purchase mortgage-backed securities in an attempt to cut already-low interest rates on home purchase loans.  But Cole said he does not see the connection between housing loan interest rates and the creation of more jobs.

"The problem with that is that I don't think that mortgage rates are too high," he said. "I don't see how that's really going to help the job market.  Most people who can refinance have refinanced."

You May Like

Missouri Town Braces for Possible Racial Unrest

Situation in Ferguson hinges on whether white police officer will be indicted for August shooting death of unarmed black teen; decision could come Monday More

Video Ukraine Marks Anniversary of 1930s Deadly Famine

President Poroshenko compares Soviet-era ‘genocide’ to current tactics of pro-Russia rebels in Ukraine's east More

S. Philippines Convictions Elusive 5 Years After Election-related Killings

Officials vowed to deliver justice as the nation marked the anniversary of the country's worst political massacre that left 58 dead, more than half media More

This forum has been closed.
Comments
     
There are no comments in this forum. Be first and add one

Featured Videos

Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
Ukraine Marks Anniversary of Deadly 1930s Faminei
X
Daniel Schearf
November 23, 2014 4:32 PM
During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Ukraine Marks Anniversary of Deadly 1930s Famine

During a commemoration for millions who died of starvation in Ukraine in the early 1930s, President Petro Poroshenko lashed out at Soviet-era totalitarianism for causing the deaths and accused today’s Russian-backed rebels in the east of using similar tactics. VOA’s Daniel Shearf reports from Kyiv.
Video

Video Hong Kong Protests at a Crossroads

New public opinion polls in Hong Kong indicate declining support for pro-democracy demonstrations after weeks of street protests. VOA’s Bill Ide in Guangzhou and Pros Laput in Hong Kong spoke with protesters and observers about whether demonstrators have been too aggressive in pushing for change.
Video

Video Law Enforcement, Activists in Ferguson Agree to Keep Peace

Authorities in Ferguson, Missouri, say they have agreed with protest leaders to maintain peace when a grand jury reaches its decision on whether to indict a white police officer in the shooting death of a black teenager. Ferguson, a suburb of St. Louis, has been the scene of intermittent violence since the August 9 shooting intensified long-simmering antagonism between the police and the African-American community. VOA's Zlatica Hoke reports.
Video

Video US Immigration Relief Imminent for Mixed-Status Families

Tens of thousands of undocumented immigrants in the Washington, D.C., area may benefit from a controversial presidential order announced this week. It's not a path to citizenship, as some activists hoped. But it will allow more immigrants who arrived as children or who have citizen children, to avoid deportation and work legally. VOA's Victoria Macchi talks with one young man who benefited from an earlier presidential order, and whose parents may now benefit after years of living in fear.
Video

Video New Skateboard Defies Gravity

A futuristic dream only a couple of decades ago, the hoverboard – a skateboard that floats above the ground - has finally been made possible. While still not ready for mass production, it promises to become a cool mode of transport... at least over some surfaces. VOA’s George Putic reports.
Video

Video Falling Gas Prices Impact US Oil Extraction

With the price of oil now less than $80 a barrel, motorists throughout the United States are benefiting from gas prices below $3 a gallon. But as VOA’s Kane Farabaugh reports, the decreasing price of petroleum has a downside for the hydraulic fracturing industry in the United States.
Video

Video Tensions Build on Korean Peninsula Amid Military Drills

It has been another tense week on the Korean peninsula as Pyongyang threatened to again test nuclear weapons while the U.S. and South Korean forces held joint military exercises in a show of force. VOA’s Brian Padden reports from the Kunsan Air Base in South Korea.
Video

Video Mama Sarah Obama Honored at UN Women’s Entrepreneurship Day

President Barack Obama's step-grandmother is in the United States to raise money to build a $12 million school and hospital center in Kogelo, Kenya, the birthplace of the president's father, Barack Obama, Sr. She was honored for her decades of work to aid poor Kenyans at a Women's Entrepreneurship Day at the United Nations.
Video

Video Gay Evangelicals Argue That Bible Does Not Condemn Homosexuality

More than 30 U.S. states now recognize same-sex marriages, and an increasing number of mainline American churches are blessing them. But evangelical church members- which account for around 30 percent of the U.S. adult population - believe the Bible unequivocally condemns homosexuality. VOA's Jerome Socolovsky reports that gay, lesbian, bisexual and transgender evangelicals are coming out. Backed by a prominent evangelical scholar, they argue that the traditional reading of the bible is wrong.
Video

Video Ebola Economic Toll Stirs W. Africa Food Security Concerns

The World Bank said Wednesday that it expects the economic impact of the Ebola outbreak on the sub-Saharan economy to cost somewhere betweenf $3 billion to $4 billion - well below a previously-outlined worst-case scenario of $32 billion. Some economists, however, paint a gloomier picture - warning that the disruption to regional markets and trading is considerable. Henry Ridgwell reports from London.
Video

Video Chaos, Abuse Defy Solution in Libya

The political and security crisis in Libya is deepening, with competing governments and, according to Amnesty International, widespread human rights violations committed with impunity. VOA’s Al Pessin reports from London.
Video

Video US Hosts Record 866,000 Foreign Students

Close to 900,000 international students are studying at American universities and colleges, more than ever before. About half of them come from Asia, mostly China. The United States hosts more foreign students than any other country in the world, and its foreign student population is steadily growing. Zlatica Hoke reports.

All About America

AppleAndroid