Economy Added 96,000 Jobs as Unemployment Rate Dropped to 8.1%

The economy added just 96,000 jobs in August, however the unemployment rate fell to 8.1% on lower labor force participation. The 96,000 jobs added in August represents a strong slowdown from the 141,000 jobs created in July. August’s report also included notable downward revisions, with July’s growth revised from 163,000 to 141,000 and June’s growth falling to 45,000 from an initially reported 64,000.

The majority of the slowing seen in August was in the goods producing sector, which actually shed jobs in August, losing 16,000 jobs. This is the worst performance in the goods producing sector since February 2010.

Job creation in the service producing sector slowed as well, but only by 6,000 jobs, creating 112,000 new jobs in August.

Although the unemployment rate dropped from 8.3% to 8.1% over the month, there was little true improvement in the labor market. Much of the improvement in the unemployment rate was a result of a rapidly deteriorating labor force participation rate which fell from 63.7% to 63.5% over the month. August saw 368,000 workers leave the labor force.

Read the BLS report.