By CHRISTINE HAUSER
Private job growth in the last three month was stronger than initially estimated, the government said Friday in its August report on unemployment.
Still, the economy lost another 54,000 jobs last month, mostly because of the loss of temporary Census jobs, and the unemployment rate rose to 9.6 percent from 9.5 percent.
Private companies, however, added 67,000 jobs in August, the Labor Department said, more than the 41,000 forecast. In July, the private sector growth was revised to 107,000 jobs, rather than 71,000, and the June number was revised upward to 61,000 in June from 31,000.
Over all, the government lost 121,000 jobs overall in August. State and local governments, many of them grappling with severe budget deficits, cut 1o,000 jobs, and another 114,000 temporary Census positions came to an end.
The numbers for prevous months were also revised to show a loss of 175,000 jobst in June rather than 221,000, and a loss of 54,000 in July, instead of 131,000.
The total number of unemployed people rose to 14.86 million in August from 14.59 million in July.
While the report continued to show that the pace of the recovery remains, it provided some reassurance the economy would not slipped into a double-dip recession. But concerns remain about the pace of economic growth.
President Obama on Monday said his administration was weighing new steps to bolster the economy, but any measures are likely to be small. His options are limited given that Congress has shown little appetite for more spending before the midterm elections in November, in which Republicans are hoping to reclaim both the Senate and the House.
Republicans have said that the unemployment rate remains high because the president’s stimulus spending as well as his overhauls of health care and the financial industry are a drag on the recovery. Mr. Obama and Democrats have been emphasizing that the recovery is moving in the right direction, albeit at a slow pace. The president has chided Senate Republicans for holding up a jobs bill that would offer tax breaks to small businesses and ease credit with a $30 billion initiative to channel loans through community banks.
In any case, the report on Friday provided the latest evidence that the recovery was proceeding slowly. Last week, the Commerce Department revised its estimate for growth in the second quarter down to an annual rate of 1.6 percent, from 2.4 percent. The consensus on the outlook for the second half of the year is growth of 1.5 to 2.5 percent, substantially less than what is needed for the recovery to pick up steam.
Earlier this week, the Conference Board released a monthly survey showing that consumer confidence improved slightly in August but indicated that Americans remained apprehensive about the economy and the job market. Other indicators showed that the housing market clearly slowed over the summer and that retail sales were weak in August. The crux of the problem is circular, economists said: consumer demand needs to pick up, but that is largely dependent on whether people have jobs.
And while corporate profits were generally robust in the second quarter, many companies had trimmed costs and jobs to achieve them, and many economists say corporations need actual revenue growth instead of making their earnings grow from cutting costs. Outlooks for the rest of the year were tepid.
Many economists have pinned hopes for job creation on manufacturing, but the Labor Department said that sector lost 27,000 jobs in August. An increase of about 10,000 jobs had been expected for manufacturing, but the report cited a decline in auto and auto-related jobs.
Despite the August numbers, Thomas J. Duesterberg, the president of the Manufacturers Alliance-MAPI, said the association forecast about 278,000 new jobs would be added by the end of the year, or about 15,000 to 20,000 new manufacturing jobs each month.
“We do think that manufacturing is going to continue to grow at a modest pace this year and next year,” he said. “So many jobs were cut in the previous two to three years that companies are very lean, and in order to ramp up levels of production, they are going to have to start hiring.”
Mr. Duesterberg, said that exports have continued to grow, and in fact, several industrial sectors — aerospace, basic chemicals, paper products and machinery — were running a trade surplus, which could encourage job creation. Companies are also holding back because of uncertainty over how future policies, including those for taxation and regulation, will impact their businesses and ultimately their hiring plans.
“It is very clear that there is this air of uncertainty from a policy perspective overhanging the business sector,” David A. Rosenberg, the chief economist for Gluskin Sheff, said.
The average number of hours worked in private sector was stable at 34.2 weeks, the report said. An increase would suggest that employers were asking more from their workers, a sign that could augur well for future hiring.
Average hourly earnings by workers on private payrolls edged up 6 cents to $22.66in August, from $22.60 in July, the department said.
The number of people out of work for 27 weeks or more declined by 323,000 to 6.2 million in August, from 6.6 million in July, while the median length of unemployment fell to 19.9 weeks in August, from 22.2 weeks in July.
The broadest definition of the unemployment rate, which includes the people who want jobs but did not search, rose to 16.7 percent in August, compared with 16.5 percent in July.
Some struggling with unemployment say they will settle for any work, even with pay cuts.
Susan Howard, a Leander, Tex., single mother with a master’s degree said she was laid off from her software-on-demand job in June and since then had been interviewing for jobs that would pay half her previous salary.
But with only $406 a week in benefits and some child support, she has stopped paying her mortgage, deferred her car payments, reached out to a ministry for help with utility bills and enrolled her son in a reduced-cost school lunch program.
“My résumé is posted on every career résumé site there is,” she said. “I have been called in for three interviews, but none of them have ever gotten back to me.”
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