Today's jobs report isn't as bad as experts predicted. But that doesn't mean it's good.
The jobs numbers don't suggest the nation is falling back into recession. But neither do they show an economy charging back to health.
Instead, they reveal a job market that is largely stuck.
Yes, the nation is adding private-sector jobs, which is the key to a recovery. But the rate of job growth is too low to make a dent in the unemployment rate, which has remained very high -- and essentially unchanged -- since May.
The headline numbers in this morning's jobs report are grim: Total jobs fell by 54,000 nationwide, and the unemployment rate rose slightly, to 9.6 percent.
But dig a little deeper and the picture doesn't look quite so bad, particularly given the bleak predictions we'd been hearing earlier this week.
Private employers added 67,000 jobs during August. That was more than the experts had predicted. And officials said they underestimated the number of private-sector jobs added in June and July.
The overall decline in jobs was driven mainly by an exodus of temp workers hired by the census, whose jobs ended in August; census employment fell by 114,000 during the month. While that decline may have short term consequences -- census jobs put money in peoples' pockets -- it doesn't speak to broader hiring trends in the economy.
The rise in unemployment was driven mainly by growth in the labor force (which expanded by about 500,000), rather than a decline in the number of jobs.
The broader picture: Since January, the economy has added about 700,00 jobs. But since the middle of 2007, the economy has lost about 7 million jobs. This is what it looks like when you have a massive recession followed by a slow, grinding, uncertain recovery.
Update: Analysts respond
From a BofA Merrill Lynch Global Research report:
It is a real testament to the sentiment in the market right now that over one year into an economic recovery, capital markets are getting absolutely euphoric over an employment report that still shows a fundamentally weak labor market with the momentum still soft.
Maury Harris, chief economist at UBS Securities, via Bloomberg:
The double-dip talk was probably misplaced. ... From a historical perspective, things are still soft. The economy ought to be doing better.
Morgan Stanley economist David Greenlaw, via the FT:
This report makes it unlikely that the Fed will implement new monetary stimulus measures at the September FOMC meeting ... But, such action remains a possibility at some point during the next several months if the incoming data suggest that the underlying pace of economic growth is slipping.