U.S. unemployment rises in August to 9.6 percent

There were 67,000 new jobs created in August, but the unemployment rate has risen to 9.6 percent. Last month 54,000 jobs were lost.

Even though the jobless rate has increased due to job searching, there have been 67,000 new jobs created last month. However, companies are still doubtful about hiring. Economists are pleased to see that the average hourly earnings increased from $22.60 to $22.66. Last month, 54,000 jobs were lost. This can be partly to blame for the 114,000 temporary census positions that were lost. The state and local government let go of 10,000 employees as well. “Ultimately, businesses will hire if they feel confident there will be revenue growth in the future,” said Julie Coronado, an economist at BNP Paribas. “But we’re growing at a pretty slow pace.” CBS News reports,

A jobless rate nearing 10 percent will ratchet up pressure on the Obama administration, Congress and the Federal Reserve to do more to jump start the economy. Tax cuts enacted in 2001 and 2003 are set to expire by the end of this year and many rank-and-file Democrats in Congress are joining Republicans in calling for all the cuts to be extended. President Barack Obama wants to let some tax cuts on upper income earners end.

The unemployment rate cannot decline unless companies start hiring more job seekers. For the past four months, hiring has been weak and that causes consumer spending to decrease.