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NEW YORK ( TheStreet) -- The Labor Department reported the economy created 169,000 jobs in August after adding 104,000 in July. Unemployment fell to 7.3%, largely because 516,000 more adults are no longer employed or looking for work.
Businesses continued the shift toward contingent workers. In August, 123,000 more Americans reported working part-time. Since January, the economy has added 813,000 more part-time positions but only 35,000 full time jobs.
Obama Care's mandates for employer paid health insurance coverage encourage more part-time hiring. Also, driving this trend are the growing importance of services like retailing and hospitality, and rigidity and visceral anti-business campaigns of unions -- such as those targeting
McDonald's (MCD - Get Report) and
Wal-Mart (WMT - Get Report).
The jobs count may be up but for recent college graduates and middle-aged adults seeking positions the situation is grim. Adding in part-timers who want full-time employment and discouraged adults who have abandoned searching for jobs, the unemployment rate becomes 13.7%. This figure has fallen because more adults appear reconciled to permanent part-time status.
President Obama's policies and attitudes toward business carry some considerable burden of responsibility. Those have institutionalized a buyers' market for day labor and damned many recent college graduates to a lifetime of debt as they can't find jobs permitting them to pay off burdensome student loans. Obama Care makes hiring older workers a severe financial liability.
Even with more full time positions, the pace of jobs creation is well short of what is needed. About 360,000 jobs each month would lower unemployment to 6%, but that would require GDP growth in the range of 4% to 5%. Over the last four years, the pace has been a paltry 2.2%.
Stronger growth is possible. Four years into the Reagan recovery, after a deeper recession than Obama inherited, GDP was advancing at a 5.1% annual pace, and jobs creation was quite robust.
Near term, defense cutbacks President Obama extracted from Congress last fall have subtracted some $62 billion from federal purchases. An additional $42 billion in sequestration cuts, and $200 billion in higher taxes demanded by the president, are further reducing government and consumer spending in the second and third quarters.