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Carolyn Kaster/AP/Press Association Images

US unemployment rate drops but just 92,000 jobs created in August

The latest jobs figures are not likely to boost Barack Obama’s re-election hopes ahead of the November vote.

THE US ADDED a meagre 96,000 jobs in August, fresh data showed today which is bad news for President Barack Obama’s re-election fight but bolsters Federal Reserve chief Ben Bernanke’s push for more help for the economy.

While the overall jobless rate fell to 8.1 per cent from 8.3 per cent in July, that was mainly due to another 368,000 people giving up searching for jobs and leaving the labour force, Labor Department data showed.

The number of net new jobs generated by the weak economy was lower than expected, and, combined with cuts to the previous two month’s numbers, underscored the stall in the economy in recent months: the net new jobs number was well under the year’s average of 139,000 a month and 153,000 in 2011.

Economists said it was likely to strengthen the case for fresh action at the Federal Reserve to boost growth when its policy board meets on Wednesday and Thursday, either delivering stronger easy-money policy signals or even a third round of quantitative easing (QE), or bond purchases.

“This report reaffirms that the US economy and labour market are showing unimpressive and extremely modest improvements,” said Jason Schenker at Prestige Economics.

It “gives the Fed a lot to think about next week. The Fed may not implement QE3, but today’s report raises the stakes for the Fed to implement some level of additional ‘nontraditional’ monetary policies.”

After hitting new multi-year highs on Thursday, US markets were mixed after the data came out, the S&P 500 adding 0.2 per cent while the Nasdaq was barely lower.

The dollar, meanwhile, dropped, falling to $1.27 against the euro, as traders anticipated more easing by the Fed.

Although the headline unemployment rate looked improved, the details of the data showed that Obama’s efforts to boost jobs around the country are still having little impact on the ground, an issue that will continue to dog his fight to win reelection in November.

‘Grave concern’

While the total number of officially unemployed fell to 12.5 million from 12.8 million people, the Labor Department’s data showed a sharp decline in the size of the labour force and a rise in those not looking for jobs.

The employment-to-population ratio hit a new low of 58.3 per cent, compared with the 65 per cent-plus level that was normal before the 2008-2009 recession.

Moreover, the duration of unemployment for those looking for jobs — a key worry of Fed Chairman Bernanke — was little-changed, with around 40 percent still searching for work for more than 27 weeks.

Last week Bernanke told a conference that labour market stagnation is “a grave concern,” saying that “persistently high levels of unemployment will wreak structural damage on our economy that could last for many years.”

Job creation continues to be driven by the private sector, which generated a net 103,000 new jobs, against continuing cuts by the public sector.

But that figure only demonstrates that businesses remain reticent or unable to hire. Many say they are concerned about the ongoing financial crisis in the eurozone, the sharp slowdown in China, and the US government’s political stalemate over economic policy ahead of the November 6 election.

“Given Bernanke’s speech last week, the Fed is likely to either launch a third round of QE or extend its commitment to zero rates into 2015,” said John Ryding and Conrad DeQuadros at RDQ Economics.

“However, in our view this will do little, if anything, to boost growth. There is no shortage of liquidity in the banking system with reserves at almost $1.5 trillion.

“There is, however, considerable uncertainty on the outlook for the taxation of labour and capital in 2013, which we think is the major challenge for the economy over the remainder of this year.”

- (c) AFP, 2012

Read: Obama asks for second term, says nation will recover

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    Mute Peter Cavey
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    Apr 27th 2021, 11:12 AM

    It’s my fault folks. I took my BBQ out of storage and cleaned it yesterday. I’m cursed. Last summer I bought a brand new garden furniture set. Then, 3 days later it rained for 2 months.

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    Mute Football in the Groin
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    Apr 27th 2021, 11:18 AM

    @Peter Cavey: We’ll remember this…

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    Mute Jules
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    Apr 27th 2021, 11:19 AM

    @Peter Cavey: Yep, it’s all your fault.

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    Mute Joseph Crossan
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    Apr 27th 2021, 11:47 AM

    @Peter Cavey: thank you for the laughs. Needed that today!

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    Mute Margaret O Neill
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    Apr 27th 2021, 12:02 PM

    @Peter Cavey: oh

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    Mute Bernadette Connaughton
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    Apr 27th 2021, 12:05 PM

    @Peter Cavey: Typical Peter isn’t it!!

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    Mute Elaine Gardner
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    Apr 27th 2021, 12:41 PM

    @Peter Cavey: In order to give us a fighting chance of decent weather, I trust the BBQ is back in storage and will remain there for the duration of the summer

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    Mute Ann Basquille Smith
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    Apr 27th 2021, 4:25 PM

    @Peter Cavey: So funny. I know how you feel. We made a big investment in our garden in 2007 and it rained for five years.

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    Mute Sue Kelly
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    Apr 27th 2021, 6:21 PM

    @Peter Cavey: not the only one. Got new outdoor furniture yesterday too

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    Mute Brian Kelly
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    Apr 27th 2021, 11:53 AM

    That’s it! Summer is over for another year. When you think of it, it’s been like this the last number of years. We get a great week or so (7-8) days of sunny weather then it rains until September. Maybe after all Nostradamus was correct in his prediction, that the time will come when man can’t tell the difference between the seasons anymore. Certainly feels like it anyway today :-D

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    Mute Eoin Hennigan
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    Apr 27th 2021, 11:55 AM

    @Brian Kelly: short memory, we had a glorious Summer last year throughout lockdown and afterwards.

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    Mute Paul Cunningham
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    Apr 27th 2021, 12:00 PM

    @Eoin Hennigan: I just remember Irish Water ruining it for everyone, the day they announced a hosepipe ban it rained for weeks in July

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    Mute Pat Breen
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    Apr 27th 2021, 12:33 PM

    @Eoin Hennigan: rained June July and August

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    Mute Brian Kelly
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    Apr 27th 2021, 12:58 PM

    @Eoin Hennigan: no!…. we had a great week in the very first lockdown then it went downhill. It was just back to normal Irish weather. Rain and showers. I’m a weather fanatic lol.

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    Mute NotMyIreland
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    Apr 27th 2021, 1:52 PM

    @Eoin Hennigan: we got all our sun in the first couple of weeks of lockdown when it was to early to have proper warmth. June had 28%, July 33% and August 24% more rain than the average year. So all in all summer last year could be considered a wash out.

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    Mute The Firestarter
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    Apr 27th 2021, 3:31 PM

    @Eoin Hennigan: No we didn’t, late April & May were stunning, so much so that Irish Water were threatening water shortages. However after the June Bank Holiday it was the usual Irish Summer of a few good days here and there, so it most certainly was not a glorious Summer.

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    Mute Pauline Gallagher
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    Apr 27th 2021, 4:45 PM

    @Brian Kelly: last year, it was above average temperatures and dry and sunny all through second half of March, all of April, May and the first two weeks of June. We were told not to water the flowers because of drought conditions. Summer 2018 was lovely as well.

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    Mute The Firestarter
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    Apr 27th 2021, 6:14 PM

    @Pauline Gallagher: You must be one of these Irish People who thinks it’s a lovely day if it’s not raining.

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    Mute Sue Kelly
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    Apr 27th 2021, 6:22 PM

    @Eoin Hennigan: 100%

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    Mute Petulant mcbarity
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    Apr 27th 2021, 7:14 PM

    @Brian Kelly: it was nearly two months of good weather last spring.

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    Mute Ed
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    Apr 27th 2021, 11:19 AM

    Few showers, be grand.

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    Mute Sommer Church
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    Apr 27th 2021, 11:01 AM

    Damn it, was really enjoying the lovely weather!

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    Mute ed w
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    Apr 27th 2021, 1:35 PM

    “met eireann forecasts rain for most of the week ” says the journal headline. reads on tommorrow will be cool and dry ?

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    Mute Ann Basquille Smith
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    Apr 27th 2021, 4:28 PM

    @ed w: most of the week not all of the week.

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    Mute BoJackHorseman
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    Apr 27th 2021, 11:51 AM

    Great news :)

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    Mute Maximilian Cope
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    Apr 27th 2021, 11:48 AM

    But… Where is the news? Actually this is a fact.

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    Mute Aaron92utd
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    Apr 27th 2021, 11:59 AM

    @Maximilian Cope: you implying normally news had no facts? Or is generally devoid of them?

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    Mute Paul Cunningham
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    Apr 27th 2021, 12:01 PM
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