Sep 07, 2012 10:38 AM EDT
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Unemployment Falls to 8.1 Percent; 96,000 Jobs Added In August

By Donovan Jackson
Unemployment
(Photo : Reuters) People wait in line to meet with job counselor during a job fair at Workforce1 in New York

In August, the unemployment rate fell to 8.1 percent from July's 8.3 percent due to the size of the labor force dropping, according to a Labor Department report Friday.

The Unemployment report could influence voters' views on the economy as the presidential election draws to its conclusion in about 60 days.

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Helping to combat unemployment, the private sector added 103,000 jobs despite a loss of 15,000 manufacturing jobs. Federal, state and local governments cut 7,000 jobs. Job gains were strongest in food services and bars, professional and technical services and health care.

Economists' consensus forecast had predicted non-farm job gains of 127,000, including 138,000 in the private sector and 11,000 government losses. Employment figures for June and July were revised down with a total of 41,000 fewer jobs created in those two months.

The past three months, monthly job gains have averaged 94,000 compared with 95,000 a month in the second quarter and well below the average monthly gain of 225,000 in the first quarter.

Since the start of 2012, job growth has averaged 139,000 per month compared to an average monthly gain of 153,000 last year, the Labor Department said.

The August report was disappointing in other respects. The average workweek was unchanged at 34.4 hours. Employers typically increase the hours of existing employees before hiring additional staff, which isn't happening. And average hourly earnings dipped by one cent to $23.52.

Meanwhile, the number of temporary workers - also a sign of more permanent hiring - fell by about 5,000 for the month.

Although not the most positive sign yet still better than nothing, the Meanwhile, the number of temporary workers - also a sign of more permanent hiring - fell by about 5,000 for the month.

Federal Reserve Chairman Ben Bernanke said last week that the economy "is far from satisfactory." A still-weak housing market has begun to rebound and consumer spending has picked up. But manufacturing output has slowed substantially in recent months, and consumer confidence has fallen.

Friday's jobs report could be influential in Fed policymakers' discussions next week about whether the central bank should buy more Treasury or government mortgage-backed bonds in a bid to further push down long-term interest rates. Doing that could encourage more purchases of homes, cars and factory equipment. Some economists expect the Fed to take the more modest step of tentatively committing to keep short-term interest rates near zero until at least 2015. The plan now extends to at least late 2014.

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