WASHINGTON (AP) — Businesses likely shrugged off recession fears and kept hiring in August, although not nearly enough to lower the unemployment rate.
Analysts forecast that the economy added 93,000 jobs last month, down from 117,000 in July. The unemployment rate is expected to stay at 9.1 percent, according to a survey by Factset.
The government’s monthly jobs report will be released Friday.
The projected job totals for August are barely enough to keep up with population growth. The economy needs to add closer to 250,000 jobs per month to rapidly bring down the unemployment rate, which has been above 9 percent in all but two months since May 2009.
Weak growth, a downgrade of long-term U.S. debt and a sell-off on Wall Street likely kept some businesses from hiring.
And a strike at Verizon Communications Inc. last month is also expected to lower the job totals. As many as 45,000 Verizon employees were off the payrolls for about two weeks. Those employees are back at work.
Still, recent data show consumers and businesses weren’t nearly as spooked by the summer shocks as some economists had feared.
Most retailers reported that sales grew last month. Target Corp., Macy’s Inc., teen retailer Wet Seal Inc. and warehouse club operator Costco Wholesale Corp. all posted sales gains that beat Wall Street expectations. Luxury chains such as Nordstrom Inc. and Saks also fared well.
And car buyers lifted U.S. sales last month. Analysts had expected a weaker August because of anxiety about the economy and Hurricane Irene, which forced many dealers to close during the month’s final weekend.
The manufacturing sector managed to expand in August for the 25th straight month. Last month’s growth, though modest, defied fears that manufacturing, one of the economy’s few sources of strength, had contracted last month.
Meanwhile, fewer people applied for unemployment benefits last week, a sign that layoffs have eased a bit.
All that delivered a sense of relief that the economy is still expanding — even if it’s not enough to reduce the unemployment rate, raise wages and drive the housing market out of its depression.
The economy expanded at an annual pace of only 0.7 percent in the first six months of the year. That was the slowest six months of growth since the recession officially ended in June 2009.
Employers added an average of 72,000 jobs from May through July, down from an average of 215,000 per month in the previous three months.
Most economists forecast that growth may improve to about a 2 percent annual rate in the July-September quarter. But that’s not fast enough to generate many jobs.
The economy’s weakness was underscored Thursday by the Obama administration, which estimated that unemployment will average about 9 percent next year, when President Barack Obama will run for re-election. The rate was 7.8 percent when Obama took office.
The White House Office of Management and Budget projects overall growth of only 1.7 percent this year.
Next week, Obama will deliver a rare address to a joint session of Congress to introduce a plan for creating jobs and boosting economic growth.