The unemployment rate jumped almost half a point to 9.7% in August, the highest since 1983, reflecting a poor job market that will make it hard for the economy to begin a sustained recovery. While the jobless rate rose more than expected, the economy shed a net total of 216,000 jobs, less than July’s revised 276,000 and the fewest monthly losses in a year, according to Labor Department data released Friday. Economists expected the unemployment rate to rise to 9.5% from July’s 9.4% and job reductions to total 225,000.
The rise in the jobless rate was partly due to 73,000 people joining the civilian labor force and the government finding that the number of unemployed Americans jumped by nearly 500,000 to 14.9 million. Those figures are from a different survey than the report on total job cuts.
The civilian labor force usually grows as a recession winds down and optimism about finding work grows. But as long as Americans remain anxious about their jobs, consumer spending isn’t expected to rise enough to power a rebound. Analysts expect businesses will be reluctant to hire until they are convinced the economy is on a firm path to recovery. Many private economists, and the Federal Reserve, expect the unemployment rate to top 10% by the end of this year.
