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Jobless rate drops, but job growth slow

3:26 PM, Sep 7, 2012   |    comments
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WASHINGTON (AP) -- Despite today's bleak numbers on job creation, stocks have been holding fairly steady today. And one economist says it's because investors are now getting more confident that the Federal Reserve will unveil a new bond-buying program next week to try to lift the economy.

John Silva of Wells Fargo says the jobs report will reinforce the Fed's view that "the economy is growing at a sub-par pace."

The jobless rate fell to 8.1 percent from 8.3 percent, but it was only because more people gave up looking for jobs. Employers added just 96,000 jobs in August, a number that was weaker than expected. It's well below the average for this year and last year.

There were other discouraging numbers as well. Hourly pay fell, manufacturers cut the most jobs in two years and the number of people in the work force dropped to its lowest level in 31 years.

Republican presidential candidate Mitt Romney says it shows that President Barack Obama's policies "haven't worked."

But the White House's top economist notes that August marked the 30th straight month of private sector job gains.

Economist Jim O'Sullivan of High Frequency Economics says the numbers show "no sign of momentum fading." He said it's an economy that's "still growing, but pretty modestly."

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