Unemployment At 4.9%, A Four Year Low

Even bad-news weeks sometimes end with the soothing clang of cowbell.

The 4.9 percent unemployment rate reported for August was down a notch from July's 5 percent rate and was the lowest since August 2001.

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In Friday's report, U.S. employers added 169,000 jobs in August, reflecting increased employment in industries, including construction, professional and business services, health care and education, and financial activities. But manufacturers shed jobs for the third straight month, reflecting the industry's sometimes bumpy road to recovery from the 2001 recession.

Also encouraging was that payroll gains were revised up for both June and July. Employers in July added 242,000 jobs, an improvement from the government's initial estimate of 207,000 net job gains. For June, 175,000 jobs were added, up from a previous estimate of a 166,000 jobs gain.

The payroll gain of 169,000 reported for August was less than the 190,000 new jobs some economists were forecasting before the release of the report. Economists were predicting the unemployment would hold steady at July's 5 percent rate.

Over and over the job-creation numbers are underestimated. If the pattern holds so will August's.

But Katrina and soaring oil prices may finally stop the economic boom, just when people may have started to notice it all:

Many economists believe the hurricane's fallout will slow overall economic growth in the months ahead as higher energy prices crimp consumers' and businesses' appetite to spend. Some believe growth in the final quarter of this year could come in at an anemic pace of around 2 percent.

Such a scenario could make businesses more cautious in their hiring, which could raise the nation's unemployment rate.

Isn't it usually the case that devastating storms actually help employment? There sure are going to be a lot of construction workers and other tradesmen hired shortly.

posted by Ace at 09:25 AM

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