Job Growth Halts

Job growth came to a halt in August, the government reported Friday, stark new evidence that the nation's economy remains deeply troubled.

Employers put the brake on hiring during a tumultuous month that saw the Washington debt-ceiling standoff, wild swings on Wall Street and financial turmoil in Europe. A strike at Verizon Communications that cut 45,000 people from payrolls contributed to the dismal report.

See also: The nation's financial pain, state by state.

The unemployment rate stayed at 9.1 percent. But there was a bright spot: older workers saw gains. Men 55-plus made the most progress — their jobless rate fell to 7 percent in August from 7.4 percent in July.

The labor landscape also improved for older women. Their jobless rate declined to 7.1 percent in August from 7.3 percent the previous month.

Older people continued to stay out of work longer than younger ones, but the duration eased slightly. The average length of unemployment for workers 55-plus was 52.4 weeks as of August, down from 52.7 weeks for the previous month. For those under 55, the average duration rose to 37.4 weeks as of August from 36.5 weeks in July.

Of the 14 million long-term unemployed — people out of work for six months or more — 55 percent were 55 or older.

Economists expected better

The flat jobs performance in August, the worst showing in 11 months, was a strong contrast to the average 60,000 in gains forecast by economists. It was down from a revised 85,000 new jobs in July.

The Bureau of Labor Statistics report immediately dampened investor moods, with the Dow Jones industrial averagage opening down about 200 points.

Economists have been debating whether the United States is headed into a second recesssion.

Of the 14 million long-term unemployed, 55 percent are 55 or older. — Photo by Shannon Stapleton/Reuters

Paul Ashworth, chief U.S. economist for Capital Economics, calls Friday's labor report an ominous sign for the recovery. "The montly gain in payrolls has now been below 100,000 for four consecutive months," he says. "The broad message is that even if the U.S. economy doesn't start to contract again, any expansion is going to be very, very modest and fall well short of what would be needed to drive the still elevated unemployment rate lower."

Next: White House pessimism. >>