Economy Sheds Fewer Jobs Than Expected

Private employers add 67,000 jobs in August; jobless rate ticks up

MSNBC.com News Services

BREAKING NEWS



WASHINGTON — U.S. employers showed a continued lack of confidence about hiring in August, suggesting the economy will struggle to grow through the rest of the year.

Private employers added a net total of only 67,000 jobs last month, according to the Labor Department’s August jobs report Friday. That number was below the amount of jobs needed to keep up with population growth, but was better than expected and down from July's upwardly revised total of 107,000.

Overall, the economy lost 54,000 jobs in August, partly because 114,000 temporary census positions came to an end. State and local governments shed 10,000 positions. The unemployment rate for August ticked up to 9.6 from 9.5 percent in July, rising for the first time in four months.

The unemployment rate cannot drop until employers significantly ramp up hiring. Employers are slow to add new workers because of uncertainty over potential costs tied to recently-passed health care and financial regulation reform as well as looming tax hikes.

The anemic economy is causing companies to conserve cash and hold back on hiring. While most economists expect the nation to avoid another recession, growth will likely be so weak for the rest of this year that the jobless rate could move back above 10 percent by early next year.

“Ultimately, businesses will hire if they feel confident there will be revenue growth in the future,” said Julie Coronado, an economist at BNP Paribas. “But we’re growing at a pretty slow pace.”

To view video concerning this topic, click here: http://www.msnbc.msn.com/id/38988367/ns/business-eye_on_the_economy