The year's most anticipated employment figures to date provided very limited good news for job seekers and likely a limited impact on the election campaign.
Total nonfarm payroll employment rose by 96,000 in August, much lower than the 163,000 jobs created n July. The unemployment rate came in at 8.1 percent, down from July's 8.3 percent, according to Bureau of Labor Statistics released this morning.
That followed Thursday's data from the Labor Department showing 12,000 fewer first-time unemployment benefits claims in the week ending last Saturday. Initial claims totalled 365,000, down from the previous week's revised figure of 377,000.
The figures fell below expectations according to James Awad, managing director of New York-based Zephyr Management L.P., which has $2 billion in investor assets under management.
Moreover, several harsh realities overhang these numbers. Awad and other financial analysts believe that real economic recovery requires at least 250,000 new jobs each month for a sustained period. "That would start to bring down the unemployment rate," he says. "But I don't think anybody is anticipating that in the short term given the uncertainty surrounding the fiscal cliff."
Also in the short term, these numbers appear unlikely to have any direct impact on Democratic President Barack Obama's re-election campaign. The lack of significant increase could indirectly fuel Republican candidate Mitt Romney's campaign, according to Ralph Hamlett, a professor of political communications at Brevard College in Brevard North Carolina.
"At their Tampa convention, the Republicans did not specify a job plan other than trusting business. Their position was to create a narrative of a failed Obama Administration incapable of putting America back to work fast enough if at all and the election amounts to a referendum on whether is Obama is doing enough," he said in an email to Politix.
Moreover, the stated unemployment rate includes those unemployed and looking for work but not those who have given up job searching. Economists believe that including those individuals would produce a true unemployment rate in excess of 15%
For the medium term, Awad holds out the possibility of at least marginal improvement after voters decide the occupant of the White House for the next four years. That and a resolution of fiscal issues will calm the markets and employers and remove some uncertainty over hiring decisions.
Guest Post written by Al Emid, a leading financial journalist and author. Follow him on Twitter at @Alemid.
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