Although the U.S. unemployment rate fell slightly to 7.3 percent in the month of August, the decline was the result of fewer people actively looking for work, according to new data from the Bureau of Labor Statistics. Mercatus Center senior research fellow Keith Hall, a former commissioner of the BLS, says that today's report raises a number of concerns about the health of the job market.
“There was very little to like in today’s employment report. Over the past six months, we’ve now averaged just 160,000 new jobs per month, and the private sector gained just 152,000 jobs in August. That is far too little to ensure a robust labor market recovery and improve the employment prospects for the long-term jobless.
“Although the unemployment rate dropped from 7.4 percent to 7.3 percent, this was entirely due to a drop in the labor force of 312,000. Without the labor force decline, the unemployment rate would have increased to 7.5 percent for the month.
“The labor force participation rate is now at its lowest level since 1978, declining to 63.2 percent. For men, the labor force participation rate hit at a record low of 69.5 percent, well below the previous record low of 69.8 percent.
“While the debate continues over the Federal Reserve’s quantitative easing policy, it is clear that the labor market has a long way to go before it is healthy.”