More On Bleak Jobs Report
As the stimulus winds down and the Congress and other world governments cut back the economy appears to be slowing. AP: Jobs report shows economic rebound may be stalling,
The latest figures suggest businesses are still slow to hire amid a weak economic recovery. Many economists were hoping to see more private-sector job growth, which would fuel the economy by boosting consumers’ ability to spend.
“It could have been worse, but it wasn’t good,” said Nigel Gault, chief U.S. economist at IHS Global Insight, an economic forecasting firm. “It’s adding to the evidence that growth has slowed.”
People left the work force “because they think there’s nothing out there,” he added.
Republicans continue to block extending unemployment benefits, causing millions to lose lifelines. “Deficit hawks,” concerned about the $1.4 trillion deficit left by the previous administration objected to includig efforts to bring taxes on the incomes of Wall Street hedge fund managers up to the level paid by ordinary citizens.
In May, home sales plunged and construction spending dropped after a popular homebuyers’ tax credit expired on April 30. Consumer confidence has fallen sharply. The European debt crisis has sent U.S. financial markets downward, lowering household wealth. And more than a million jobless Americans have been cut off from unemployment benefits after Congress adjourned for a weeklong Independence Day recess without extending federal aid.
Lots of people looking, not much to find,
All told, 14.6 million people were looking for work in June. Counting those who have given up their job searches and those who are working part time but would prefer full-time work, the underemployment rate edged down to 16.5 percent from 16.6 percent in May.
The chart that has become known on the blogs as the “scariest jobs chart” is even scarier:
The … graph shows the job losses from the start of the employment recession, in percentage terms (as opposed to the number of jobs lost).
The dotted line is ex-Census hiring. The two lines will rejoin later this year when the Census hiring is unwound.
Dean Baker at CEPR, provides a bleak analysis of these latest bleak numbers in Decline in Labor Force Leads to Drop in Unemployment.
The Labor Department reported that 652,000 people left the labor force in June, causing the unemployment rate to edge down to 9.5 percent, even as the number of employed reportedly dropped by 301,000. … also showed declines in both the length of the average workweek and the average hourly wage, providing further concerns about labor market weakness going forward … The employment-to-population (EPOP) ratio fell to 58.5 percent, reversing gains from the prior three months … The median and average duration of unemployment spells both increased to new records, 25.5 weeks and 35.2 weeks, respectively; although there was a modest decline in the share of long-term unemployed. The number of discouraged workers was more than 50 percent higher than the June 2009 figure, with the number for men being more than 70 percent higher. … there are no obvious candidates for improved growth any time soon. … manufacturing sector added just 9,000 jobs in June, after adding 70,000 over the prior two months. With the workweek shortening by 0.5 hours, there is little reason to expect robust hiring. Construction lost another 22,000 jobs, mostly in the non-residential sector … retail sector lost 6,600 jobs, its second consecutive decline. Finance shed 15,000 jobs, 6,500 of the losses were in real estate following the end of the homebuyers tax credit. …
Baker concludes his bleak analysis bleakly,
With state and local governments cutting back to deal with deficits, house prices falling again, and wages not keeping pace with inflation, there is little hope for a robust growth any time soon. It is likely that the unemployment rate will rise in the second half of the year.
Things are looking bleak.