U.S. jobless rate drops to 8.1% as people give up searching for work

September 8th, 2012 - 8:26 pm ICT by BNO News  

WASHINGTON, D.C. (BNO NEWS) — With employers in the United States adding just 96,000 jobs last month, the national unemployment rate dropped to 8.1 percent as nearly four times as many people gave up searching for jobs altogether and left the labor force, the U.S. Labor Department (DOL) said on Friday.

Economists had expected payrolls to rise by at least 125,000 in August, and some even pushed their forecasts higher after positive private sector data on Thursday. And while a drop in the unemployment rate from 8.3 to 8.1 percent may seem positive, it was mostly the result of some 368,000 people who gave up their search for work.

In the August 2012 Employment Situation report released by the Labor Department on Friday, the department highlighted the addition of 4.6 million private sector jobs over the last 30 months, including nearly 2 million in the last year. Nonetheless, economists say the U.S. economy needs to add at least 150,000 to 200,000 jobs a month to make a significant dent in the jobless rate and to keep up with the population growth in the country.

U.S. Labor Secretary Hilda Solis stated that “an economic crisis that was decades in the making will not be solved overnight,” noting that the economy was in ‘free fall’ when President Barack Obama took office. “Credit markets were frozen, and our nation was bleeding hundreds of thousands of jobs a month. But our recovery remains on a stable trajectory of positive job growth. Smart and steady wins the race.”

Republican Mitt Romney, who will face Obama in the presidential election on November 6, criticized the weak jobs report and claimed his plan would create up to 250,000 new jobs a month. “If last night was the party, this morning is the hangover,” he said, referring to Obama’s acceptance speech at the Democratic National Committee. “For every net new job created, nearly four Americans gave up looking for work entirely.”

Romney added: “This is more of the same for middle class families who are suffering through the worst economic recovery since the Great Depression. After 43 straight months of unemployment above 8%, it is clear that President Obama just hasn’t lived up to his promises and his policies haven’t worked. We aren’t better off than they were four years ago.”

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