The participation rate has fallen by 1.6 percentage points since the beginning of 2010. "Some of this is due to the aging of the workforce but it reflects a weak labor market," said Stephen Bronars, senior economist at Welch Consulting. The unemployment rate is declining for all the wrong reasons - people are dropping out of the workforce. The difference in the unemployment rate between educated workers and workers with less schooling continues to widen. College grads face an unemployment rate of 3.5 percent while the unemployment rate is 11.3 percent for high school dropouts. "There is some good news that more people are working full-time in August than in July, but generally this was a disappointing jobs report," Bronars said. Investors watch the jobs report closely because the Federal Reserve has indicated it plans to cut its stimulative bond purchases as the labor markets gain momentum and economy improves. Good enough shouldn't be an incentive to taper but on the heels of strong ISM reports and an upward revision to second quarter GDP, if the Fed was looking for an excuse to taper they can find it. On Tuesday, a report by the Institute for Supply Management, a trade group, said its manufacturing index showed the fastest factory expansion since June 2011. Last week, the Commerce Department reported that real gross domestic product increased at an annual rate of 2.5 percent in the second quarter, higher than the 1.7 percent advance estimate issued in July. Boston College economics professor Robert Murphy said the jobs report is not likely to change the consensus that has developed concerning the Fed tapering back later this month on its bond buying program. Other recent data, such as auto sales reaching post-recession highs, indicates the employment report for August is unlikely to change the dynamic toward a gradual exit by the Fed from its stimulus, Murphy said. Meanwhile, the number of Americans applying for unemployment benefits is near a five-year low, according to the Labor Department's jobless claims report on Thursday.