The August employment report shows an economy that continues to struggle to gain any momentum. Net job creation totaled a meager 60,000 last month (when one excludes the loss of temporary decennial census positions) and the unemployment rate crept higher to 9.6 percent. While a 60K average upward revision for June and July payroll data was a positive, employers have added fewer than 230,000 jobs since the recovery’s likely start time last summer. The median duration of unemployment dropped below 20 weeks for the first time since February, but there are suggestions this might have been distorted by the recent extension of unemployment benefits. Even if net job creation surges to a monthly average of 250,000 in the immediate future, it will take roughly 2-½ years just to reach the previous peak employment level of December 2007. In addition, displaced workers who have suffered from extremely long unemployment spells probably have experienced some deterioration in their human capital, which could make it quite difficult to find a job once the recovery does pick up steam.


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