Unemployment Rate Increases to 9.6% as 54,000 Jobs Lost in August

---

Researched by Industrial Info Resources (Sugar Land, Texas)--During the past four months, the unemployment situation in the United States has essentially stagnated. The private sector is not hiring at the level needed to see a significant decrease in the overall unemployment situation, the employment benefits of last year's stimulus package have essentially ended, and the temporary jobs created by the decennial census continue to decrease. In August, 54,000 jobs were lost in the U.S., driving the unemployment rate up 0.1% to 9.6%.

The manufacturing sector shed 27,000 jobs during the month, driven by a loss of 22,000 jobs in the motor vehicles and parts sector, and 7,400 jobs were lost in the transportation and warehousing sector. On the brighter side of the coin, the construction sector saw 19,000 jobs created, although at least 10,000 of those were a result of striking workers returning to work. The mining and logging sectors also saw gains for the month, creating 8,000 jobs.

Unemployment continues to remain very high in many of the key sectors across the country. The construction sector is facing a 17% unemployment rate, 0.5% higher than a year ago, as a weak housing market continues to shed construction jobs. Gains have been made in other sectors, however. The manufacturing sector has seen its unemployment rate decrease over the past year from 11.8% to 9.5%. The transportation and utilities sector also saw a decline, with its unemployment rate dropping from 9.8% to 7.3% in the past year. The mining, quarrying and oil and gas extraction sector has seen a modest decrease since August 2009, moving from 11.8% to 10.9%.

Throughout August, 14.9 million workers remain unemployed in the U.S. The number of long-term unemployed workers, those who have been without work for 27 weeks or longer, declined by 323,000 to 6.2 million nationally. In addition, 2.4 million people were marginally attached to the labor force in August, which means they were not in the labor force but wanted jobs, were willing to work, and had looked for a job within the last 12 months but are not counted as officially unemployed because they did not look for a job during the previous four weeks. Workers employed part-time for economic reasons, because their hours have been cut back, or because they have been unable to find full-time work increased by 331,000 to 8.9 million.

Industrial spending remained strong again in August, with more than 300 capital or maintenance projects worth an estimated $14.2 billion beginning construction during the month. In addition, 24 plants completed construction and began operations during the month, creating 5,500 jobs nationwide. However, much of the spending activity and plants beginning operations are not occurring in those states that have the largest unemployment problems. Regions that have been devastated in the last two years by the effects of the recession, such as the Great Lakes, are not the prime targets for companies looking to expand simply due to the overall economic stability of the states involved.

Despite solid spending monthly across the country, lackluster private sector hiring, combined with a lack of government-created jobs that were promised by last year's stimulus package, are keeping the unemployment situation in its current state. Until the overall economy improves enough that companies feel comfortable enough to invest more money in new facilities that will create construction and permanent jobs, the situation is not going to improve in the U.S. The weak housing market and recent shaky Wall Street numbers, combined with poor government solutions to the overall problems, also will help keep the unemployment situation in its state of stagnation. This situation is not likely to improve until sometime in 2011 or possibly beyond, but hopefully the nation can make modest gains in the coming months rather than lose more jobs and see the unemployment rate climb above 10% once again.

Industrial Info Resources (IIR) is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. IIR's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.