BUSINESS
09/05/2014 08:31 am ET Updated Sep 05, 2014

Economy Barely Budges In Disappointing Jobs Report

Like the monster at the end of a horror movie, the lame, sluggish recovery that we thought was dead just crawled out of the grave to give us another scare.

The job market was lousy again in August after several months of decent growth. Employers added just 142,000 jobs to non-farm payrolls, the Bureau of Labor Statistics reported on Friday, the worst month for job growth this year. It fell short of the 223,000 economists expected, according to a Briefing.com tally. It was also well below the recent pace of job growth, which had averaged more than 200,000 jobs per month so far this year.

The unemployment rate dipped to 6.1 percent from 6.2 percent in July, matching the lowest rate in nearly six years. But that was mainly due to the fact that 64,000 people gave up looking for work, taking themselves out of the ranks of the officially unemployed.

"These numbers should give us pause," Elise Gould, an economist at the Economic Policy Institute, a think tank focused on labor issues, wrote in a blog post.

Given other signs of strength in the economy, many economists rushed to dismiss the numbers. New claims for unemployment benefits have been low, and hiring surveys have painted rosier pictures of the job market.

"I don't believe it, I don't believe this data," Mark Zandi, chief economist at Moody's Analytics, told CNBC. "It's not consistent with anything."

It is certainly dangerous to read too much into one month's jobs report. There's a wide margin of error -- the payroll number could be off by plus or minus 90,000 jobs -- and these numbers will be revised repeatedly in the months to come. For whatever reason, August is a month that is unusually prone to big upward revisions, according to Jim O'Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, N.Y.

Still, we have seen enough grim jobs reports in this recovery that another weak one shouldn't come as much of a shock.

The disappearance of workers from the labor force, in particular, has been a troubling feature of the job market for a long time. Here's a chart from FiveThirtyEight's Ben Casselman that shows how, for several months in a row, many more unemployed workers have given up than have found jobs:

Long-term unemployment is still depressingly high, as this chart from Quartz's Matt Phillips shows:

If there was any bright spot to this report, it was that average hourly earnings for all workers rose by 0.6 percent in August. But earnings are up just 2.1 percent in the past year, barely keeping up with inflation. That's another feature of this recovery: Even as corporate profits have skyrocketed to record highs, wages have been flat.

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