Just 96,000 American jobs were added in August in a bleak monthly jobs report as 368,000 left the workforce, bringing labour market participation down to its lowest level for 31 years and dealing a blow to President Barack Obama’s re-election chances.

The national unemployment rate dropped to 8.1 per cent, down from 8.2 per cent, but this was only because so many people gave up looking for work. If the participation rate had not dropped so precipitously, unemployment would have risen to 8.4 per cent.

Factory employment fell by the most in two years and temporary-help companies eliminated positions for the first time in five months. The 69.9 per cent labor force participation rate for men is at lowest level recorded since the US government began tracking it in 1948.

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