The Labor Department reported Friday that the economy created a tepid 96,000 jobs in August, well below the 125,000 expected by economists and a far stretch from the plus-250,0000 needed to show robust growth. The unemployment rate slid to 8.1 percent from 8.3 percent as more Americans gave up looking for work.
The data was further evidence of a Goldilocks economy -- not too hot, not too cold, but not just right either -- that could prompt the Federal Reserve to take new steps to boost growth.
"This weak employment report, in jobs, wages, hours worked and participation is probably the last piece the Fed needs before launching another round of quantitative easing next week. QE will boost equities, damage the dollar and do little for the economy, but what else can an activist Fed do? " said Joseph Trevisani, chief market strategist at Wordwide Markets.
The report's weak tenor was also underscored by revisions to June and July data to show 41,000 fewer jobs created than previously reported. The labor force participation rate, or the percentage of Americans who either have a job or are looking for one, fell to 63.5 percent -- the lowest since September 1981.
The elevated jobless rate has put the economy front and center in the race for the White House, endangering Obama's hopes for a second term. The weak jobs report could rob Obama of any momentum he hoped to gain with his speech at the Democratic National Convention.
