Unemployment remained unchanged in August as employers added no new jobs for the first time since World War II, the Department of Labor reported Friday morning. The disappointing numbers will add pressure on President Obama to do more to stimulate hiring, which has been in a funk since the financial crisis began three years ago.
Economists had been expecting 93,000 new jobs last month, down from 117,000 in July. The unemployment rate stayed, as expected, at 9.1 percent. The fact that no net new jobs were added in August was yet another dose of bad news for the economy. It's the first time since February 1945 that the government has reported a monthly net job change of zero.
The Dow Jones industrial average fell 253 points, or 2.2 percent, to 11,240 at the closing. Shares of major banks swooned, with Bank of America down more than 8 percent to $7.25 a share at the end of the day. Gold rose almost 3 percent, or $48, to $1877 an ounce.
"We're looking at a pullback that's fully appropriate with the magnitude of how ugly today's jobs report was," Phil Orlando, chief equity strategist with Federated Investors, told ABC News.
Another disappointing sign was a drop in the average workweek to 34.2 hours from 34.3 hours. Average hourly earnings fell 0.1 percent when economists were expecting an increase of 0.2 percent. All this means people will have less money to spend, creating yet more drag on the economy and less demand for hiring.
A more accurate portrait of jobless America may be 16 percent to 20 percent, according to some experts. That's because the jobless numbers don't count people who have stopped looking for work or legions of underemployed, like Nichelle Gainer, 41, who clocks 25 to 29 hours at her retail position before heading home to her cousin's house. It's her new place of residence since she became underemployed.
Gainer spent years working as a researcher and reporter at numerous publications but is now part of a new crop of workers in the labor market who are underused and undercompensated.
A report from the White House yesterday announced the unemployment rate would not fall to 6 percent until 2016. "In sum, economic growth and job creation, while positive, have not been strong enough to bring down the unemployment rate to an acceptable level," according report from the Office of Management and Budget.
A strike by 45,000 Verizon workers, who have since returned, lowered the job totals. Private employers added 17,000 jobs. Without the Verizon strike the total would have been 62,000.
It's been awhile since many of the underemployed or unemployed have filed first-time unemployment claims. After exhausting 99 weeks of unemployment, Gainer, a New York resident, is among the uncounted.
Two years after the reported "recovery," 1.4 million, or one in every seven, New York workers is unemployed, underemployed or has given up looking for work, according to the Fiscal Policy Institute.
"Half of New York's unemployed have been out of work for more than six months, and 29 percent have been jobless for a year or more," according to the Fiscal Policy Institute.
It's bleak news for the millions sending out resumes into the black hole of the Web, but Gainer is not a discouraged worker. For Gainer, a weekly income of around $275 in a city where the median rent is $2,400 is nothing to get her down.
"I'm optimistic about the job search. If I speak and believe pessimism, then I'm not going to get anywhere, said Gainer. "I am trying to get in the space where I'm able to do creative work, and I want to go back to school."
On Monday, while others celebrate Labor Day, many will wonder when they will once again participate in the federal holiday that celebrates the strength of American workers.
"The economy is absolutely failing, and it's not likely to turn around with the present policies," said Peter Morici, an economist and professor at the University of Maryland. "I hold little prospect of hope for what the president will state on Thursday."
After a scheduling flap, President Obama will present a jobs plan on Thursday, Sept. 7, that is expected to cover three areas : tax relief, infrastructure investment and assistance for the long-term unemployed.
But, Morici said, much like George W. Bush, the president is highly bound to an ideology and an agenda.