A weak and weakening labor market. The Bureau of Labor Statistics' report on the Employment Situation for August shows:
The unemployment rate rose from 5.7 to 6.1 percent in August, and non-farm payroll employment continued to trend down (-84,000), the Bureau of Labor Statistics of the U.S. Department of Labor reported today. In August, employment fell in manufacturing and employment services, while mining and health care continued to add jobs. Average hourly earnings rose by 7 cents, or 0.4 percent, over the month.
Since the payroll employment peak in December 2007, employment has fallen by 605,000 jobs or 0.44%. The unemployment rate began its upward drift in early 2007, from a low of 4.4% to its current value of 6.1%. The most comprehensive unemployment rate that the BLS tracks (U-6, which also includes marginally attached workers and those employed part-time for economic reasons) is now at 10.7% (up from its low of 7.9%). That's the highest it has been in 14 years.
But is a weak labor market enough to call this a recession? As macroblog put it yesterday:
I pity the folks on the National Bureau of Economic Research (NBER) Business Cycle Dating Committee, burdened as they are with the task of determining if and when the U.S. economy finds itself in an officially designated “recession.”
Not an easy task, with second quarter GDP growth at a 3.3% annual rate in the preliminary report. I will be very interested to see how the final report for the second quarter comes in (later this month) and how the advance GDP report for the third quarter comes in (late October, just in time to influence the election).