August Jobs Report Underwhelms

The U.S economy added 96,000 new jobs in August, a disappointing number that fell below most economists’ expectations.

In addition to the weak numbers for August, the government also revised June and July’s jobs numbers to show that the economy added 41,000 fewer new jobs than it originally estimated.

Despite the slow jobs growth, the unemployment rate did drop from 8.3 percent to 8.1 percent, largely because of workers who have stopped searching for employment.

It’s unclear what the political impact of the jobs report will be. While Mitt Romney predictably slammed the weak numbers, saying in a statement that “If last night was the party, this morning is the hangover,” the numbers may not be poor enough to truly shake up the presidential race. Democrats are concerned that the report may overshadow the positive coverage from their highly successful convention, but as Jonathan Bernstein wrote in The Plum Line: “especially with the reported unemployment rate falling, it’s unlikely that this report is bad enough to really change the way reporters and pundits see the Charlotte and Tampa meetings,” much less the overall state of the race itself.

It’s also unclear how significant the report truly is. As Chairman for the White House Council of Economic Advisers Alan Krueger wrote in The White House Blog, “it is important not to read too much into any one monthly report” given how volatile the monthly numbers can be. As the revision of the June and July numbers show, what the government reports today may not reflect the true state of the economy