Companies add 67K workers, but jobless rate rises

Companies add 67,000 workers in August; unemployment rate climbs to 9.6 percent

In this Aug. 25, 2010 photograph, job seekers including Lindsey Wright, of Detroit, center, attend a job fair in Southfield, Mich. On Friday, Sept. 3, 2010, at 8:30 a.m. EDT, the Labor Department issues the August unemployment report. (AP Photo/Paul Sancya)

Christopher S. Rugaber, AP Economics Writer, On Friday September 3, 2010, 9:23 am

WASHINGTON (AP) -- Private employers hired more workers over the past three month than first thought, lifting hopes for the weak economy. But the unemployment rate rose in August for the first time in four months as more people entered the market looking for work.

Companies added a net total of 67,000 new jobs last month and both July and June's private-sector job figures were upwardly revised, the Labor Department said Friday.

Stock futures surged after the report was released. Wall Street analysts expected a smaller gain, according to Thomson Reuters.

Overall, the economy lost 54,000 jobs as 114,000 temporary census positions came to an end. For the first time this year, the manufacturing sector lost jobs -- down a net total of 27,000 for the month. State and local governments shed 10,000 positions.

Temporary employment rose by nearly 17,000, after ticking down in July.

The jobless rate rose to 9.6 percent from 9.5 percent in July. More than a half-million Americans resumed their job searches in August, which drove up the jobless rate. When the unemployed stop looking for work, they are no longer counted in the jobless rate. It's the first time the labor force has grown since April.

Both June and July's figures were revised to show the private sector created more jobs in both months. The July figures were revised upward to 107,000 from 71,000. June was revised upward to 61,000 from 31,000. The revisions reflected smaller losses in construction, temporary help services and non-census government jobs.

Still, hiring has now been weak for four straight months. That deprives consumers of cash and reduces their ability to spend. That is one of the main reasons economic growth is likely to be so weak for the rest of this year that the jobless rate could keep rising and hit 10 percent in the coming months.

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Jobless claims rise to highest level in 9 months

AP – In this photo made June 22, 2010, Stacey Miller, 28, center, and her sons Donavan, 11, second from right, …

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By CHRISTOPHER S. RUGABER, AP Economics Writer – 11 mins ago

WASHINGTON – New applications for unemployment insurance reached the half-million mark last week for the first time since November, a sign that employers are likely cutting jobs again as the economy slows.

The Labor Department said Thursday that initial claims for joblessbenefits rose by 12,000 last week to 500,000, the fourth increase in the past five weeks. Wall Street economists forecast that claims would drop.

The four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December. There were no special factors that distorted the numbers, a Labor Department analyst said.

The increase suggests the economy is creating even fewer jobs than in the first half of this year, when private employers added an average of about 100,000 jobs per month. That's barely enough to keep theunemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months.

Stock futures fell on the news. The Dow Jones industrial average futures had risen more than 50 points before the report was released. They dropped quickly and were down as much as 20 points afterward.

Jobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. After flattening out earlier this year claims have begun to grow again.

The number of people continuing to receive benefits fell by 13,000 to 4.5 million, the department said. Thecontinuing claims data lags initial claims by one week.

But that doesn't include millions of people receiving extended unemployment insurance, paid for by the federal government. About 5.6 million unemployed workers were on the extended unemployment benefit rolls, as of the week ending July 31, the latest data available. That's an increase of about 300,000 from the previous week.

During the recession, Congress added up to 73 extra weeks of benefits on top of the 26 weeks customarily provided by the states. The number of people on the extended rolls has increased sharply in recent weeks after Congress renewed the extended program last month. It had expired in June.

Private employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary census positions.

July marked the third straight month that the private sector hired cautiously. Economists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year.

In a healthy economy, jobless claims usually drop below 400,000. But the recent increases in claims provide further evidence that the economy has slowed and could slip back into a recession. Many analysts are worried that economic growth will ebb further in the second half of this year.

After growing at a 3.7 percent annual rate in the first quarter, the economy's growth slowed to 2.4 percent in the April-to-June period. Some economists forecast it will drop to as low as 1.5 percent in the second half of this year.

http://news.yahoo.com/s/ap/us_economy