The Labor Department reported Friday that non-farm payroll employment fell by 54,000 in August, largely because of government layoffs, including 114,000 temporary workers hired for the census being laid off, along with state and local government workers.

Private-sector payroll employment trended upward modestly by 67,000 jobs, but the unemployment rate nevertheless crept up slightly to 9.6 percent.

In addition to the rise in August, the estimates of private sector job growth for June and July were revised up by a total of 66,000. Since last December, private sector employment has risen by 763,000.

“Against the backdrop of some unsettling economic data in the past few weeks, today’s numbers are reassuring that growth and recovery are continuing,” said White House economic advisor Christina Romer on the White House blog. “At the same time, the fact that the growth of private sector payrolls is below the level needed to keep up with normal growth of the labor force is obviously unacceptable. There are a number of steps we could take to help increase private sector job growth and put the economy on a path of steadily declining unemployment. We will be working with Congress on these measures in the coming weeks.”

President Obama noted that despite the positive news about private sector employment, “It's not nearly good enough."

“That’s why we need to take further steps to create jobs and keep the economy growing, including extending tax cuts for the middle class and investing in the areas of our economy where the potential for job growth is greatest,” he added.

The Labor Department reported that the number of unemployed persons (14.9 million) and the unemployment rate (9.6 percent) were little changed in August. From May through August, the jobless rate remained in the range of 9.5 to 9.7 percent. Among the major worker groups, the unemployment rate for adult men (9.8 percent), adult women (8.0 percent), teenagers (26.3 percent), whites (8.7 percent), blacks (16.3 percent), and Hispanics (12.0 percent) showed little change in August. The jobless rate for Asians was 7.2 percent, not seasonally adjusted.

The number of long-term unemployed (those jobless for 27 weeks and over) declined by 323,000 over the month to 6.2 million. In August, 42 percent of unemployed persons had been jobless for 27 weeks or more.

In August, the civilian labor force participation rate (64.7 percent) and the employment-population ratio (58.5 percent) were essentially unchanged.

The number of persons employed part-time for economic reasons (sometimes referred to as involuntary part-time workers) increased by 331,000 over the month to 8.9 million.

These individuals were working part-time because their hours had been cut back or because they were unable to find a full-time job.

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