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General Motors Co
American Axle & Manufacturing Holdings Inc
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Payrolls rose less than projected in August and the unemployment rate declined as more Americans left the labor force, indicating the U.S. labor market is stagnating.
The economy added 96,000 workers last month following a revised 141,000 rise in July that was smaller than initially estimated, Labor Department figures showed today in Washington. The median estimate of 92 economists surveyed by Bloomberg called for a gain of 130,000. Unemployment unexpectedly fell to 8.1 percent, and hourly earnings were unchanged.
Employers may be reluctant to expand headcounts as they face a global economic slowdown and the so-called fiscal cliff of automatic tax increases and government spending cuts. The damage inflicted by the lack of progress on jobs is the reason Federal Reserve Chairman Ben S. Bernanke last week said the central bank may need to do more.
“Businesses are trying to plan for a climate of uncertainty,” Robert Dye, chief economist at Comerica Inc. in Dallas, said before the report. “There’s too much uncertainty about taxes, about expenditure cuts. The economy is already reacting to it.”
Bloomberg survey estimates ranged from increases of 70,000 to 185,000. Revisions to prior reports subtracted a total of 41,000 jobs to payrolls in the previous two months.
Factory employment fell by the most in two years, temporary-help companies eliminated positions for the first time in five months and the share of the working-age population in the labor force slumped to the lowest since 1981.
Today’s figures come two months before the presidential election. Employment and the economy are central themes in the campaign, with President Barack Obama and Republican challenger Mitt Romney each trying to convince voters they can best energize the expansion and create jobs.
Private payrolls, which exclude government agencies, rose 103,000 after a revised gain of 162,000. They were projected to rise by 142,000, the survey showed.
The jobless rate fell from 8.3 percent as 368,000 Americans left the labor force. Unemployment was forecast to hold at 8.3 percent, according to the survey median. Estimates in the Bloomberg survey ranged from 8.1 percent to 8.4 percent.
Factory payrolls decreased by 15,000, compared with a survey forecast for a 10,000 increase, after a 23,000 gain in the previous month. Automakers cut 7,500 jobs last month.
The figures reflected the reversal of a July increase that was propelled by fewer shutdowns at automakers for annual retooling related to the new model year. Still, carmakers may continue to add workers. Chrysler Group LLC, Ford Motor Co., General Motors Co. (GM), Toyota Motor Corp. and Honda Motor Co. reported U.S. auto sales in August that rose more than analysts estimated as new models attracted buyers.
Employment at service-providers increased 119,000. Construction companies added 1,000 workers and retailers took on 6,100 employees. Government payrolls decreased by 7,000. The number of temporary workers decreased almost 5,000.
Average hourly earnings were little changed, and up 1.7 percent from August 2011, today’s report showed.
The participation rate, which indicates the share of working-age people in the labor force, fell to 63.5 percent, the lowest since September 1981, from 63.7 percent.
For Kimberly Hackler of White, Georgia, the job search has been “frustrating at best, a little disheartening.” The 49- year-old has been looking for work since November, applying for about 190 positions.
“I’m very concerned about those of us who are unemployed and where are we going to find stable employment,” Hackler said. “I don’t see the economy improving anytime soon. I am concerned it could get worse.”
American Axle & Manufacturing Holdings Inc. (AXL), a maker of axles and crankshafts, is among companies looking to expand as the auto industry rebounds. The Detroit-based company plans to hire 400 to 500 workers at its Three Rivers, Michigan, factory over the next two years, David Tworek, a spokesman, said in an e-mail last month.
Others are looking to pull back. Mountain View, California- based Google Inc. (GOOG) said on Aug. 13 it will cut about 4,000 positions at its Motorola Mobility Holdings Inc. unit, with about one-third of the reductions coming in the U.S. Printer maker Lexmark International Inc. (LXK) on Aug. 28 announced plans to eliminate 1,700 jobs globally.
Payroll gains slowed from an average 226,000 in the first quarter to 73,000 in the April to June period, before picking up in July. Before today’s report, data showed it had taken the U.S. three years to recover about half, or 4 million, of the 8.8 million jobs lost as a result of the 18-month recession that ended in June 2009.
The unemployment rate, derived from a separate Labor Department survey of households, has exceeded 8 percent since February 2009, the longest stretch in monthly records going back to 1948.
Bernanke in an Aug. 31 speech in Jackson Hole, Wyoming, cited “the daunting economic challenges” that confront the U.S. He also said the Fed will provide additional policy stimulus as needed to promote a stronger economic recovery.
“The stagnation of the labor market in particular is a grave concern,” he said. Persistently high unemployment “will wreak structural damage on our economy that could last for many years.”
Fed officials at their July 31-Aug. 1 meeting were moving toward additional monetary policy action, according to minutes of the gathering. Many members of the panel said more stimulus will be needed “fairly soon” unless the recovery shows signs of a “substantial and sustainable strengthening.”
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