Forget four years ago: We're worse off than in 2011

The jobs numbers show the economy is headed in the wrong direction.

FORTUNE -- Like three decades ago, politicians are focused on whether we're better off than we were four years ago. Wall Street is focused on whether Fed Chairman Ben Bernanke will act. But when it comes to the economy, and where we're headed, the more important question is this: Are we better off than we were a year ago? On Friday, the monthly jobs number gave us a pretty clear answer. And it's not the one Obama, or more importantly the 12.5 million Americans who can't find work, want to hear. Things are getting worse.

Let's start with the actual number. In August, employers added 96,000 workers to their payrolls. That's actually better than a year ago, if only slightly. In August 2011, the number rose 85,000. What's more, this month's jobs growth is not that far from the 150,000 or so positions that economists say we need to consistently bring down the unemployment rate.

MORE: Obama answers his critics

The problem is it's unlikely we will get to that magic number anytime soon. Compared to where we were a year ago, the economy is headed in the wrong direction.

Here's the trend: Over the past six months, the economy has added an average of 97,000 jobs a month. At this time a year ago, the six-month average was 136,000, meaning the economy was growing 40% faster than it is today.

For the whole year, the economy has added an average of 139,000 jobs a month. That's better, but still worse than a year ago when that figure was 143,000.

What's more, those numbers come from the survey of employers. When the Labor Department asks individuals about their employment status, the situation looks a good deal worse. According to that survey, which many say does a better job of capturing new businesses and the self-employed, six-month average employment gains drop to a measly 6,000 jobs, or nearly one-sixth fewer than we were adding a year ago.

MORE: Throwing cold water on the government's employment numbers

Secondly, the wage picture isn't improving either. The industry with the biggest hiring jump in August was restaurants, which are jobs, but not high paying ones. Employment in the manufacturing industry, on the other hand, dropped by 15,000. A year ago, the economy was still adding manufacturing jobs.

As a result, the average hourly wage for all workers fell in August by a penny to $23.52.  That was up $0.40 from a year ago. But at just 1.7%, it's not much more than inflation. And it's less than the $0.49 increase we had a year ago. Of course, that's not a big drop in wage growth, but it's significant nonetheless. Higher wages means that employers are eager to add workers. That's clearly still not the case. And even if that's only slightly less so than a year ago, remember we're another year into the official recovery. Demand for workers should be significantly stronger at this point, not slightly worse.

Then there are temp workers. Most economists believe temporary hires are a good indication of where the job market is headed. It's a way for employers to dip their toe in the water, and many of the jobs lead to permanent positions. A year ago, companies were adding temp workers, nearly 21,000 in August alone. That's not the case any more. Last month, employers cut the number of temp workers they had working for them by nearly 5,000.

MORE: Why good jobs numbers won't last

Overall, you could still make the case that we are better off than a year ago. The number of unemployed people in the country, at least just counting those looking for work, is down 1.3 million in the past year to 12.5 million. And the unemployment rate dropped  a full percentage point to 8.1%.

But in the same time, the pace of people dropping out of the workforce is up too. That number rose by 2.7 million in the past year, or a half a million more than a year before that. Yes, some of those people voluntarily retired. But a good percentage of those people have just given up. That's probably the best gauge of optimism in the economy that there is. If you don't believe you can land a job, you basically don't believe in the economy. And as long as the number of people who lose faith in the economy is rising, it's harder to make the case that we're better off.

Source & Image : CNN Money