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Archive for Saturday, July 3, 2010

Jobs report casts shadow over recovery

July 3, 2010

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Flora Guan, left, and Jessica Yang, right, recent graduates of San Francisco State University, fill out forms to take part in surveys with Fieldwork San Francisco on June 28 at a National Career Fair in San Francisco. The unemployment rate fell to 9.5 percent, its lowest level in almost a year.

Flora Guan, left, and Jessica Yang, right, recent graduates of San Francisco State University, fill out forms to take part in surveys with Fieldwork San Francisco on June 28 at a National Career Fair in San Francisco. The unemployment rate fell to 9.5 percent, its lowest level in almost a year.

— A second straight month of lackluster hiring by American businesses is sapping strength from the economic rebound.

The jobless rate fell to 9.5 percent in June, still far too high to signal a healthy economy. It came in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed.

The private sector added just 83,000 jobs for the month. Looked at from that angle or almost any other, from a teetering housing market to falling factory orders, the recovery is limping along as it enters the year’s second half. And that is when the benefits of most of the government’s stimulus spending will begin to wear off.

The fate of the economy will hinge on whether it can stand on its own. President Barack Obama acknowledged the slow pace of the recovery and used the new jobs figures to argue for more stimulus spending and extended unemployment benefits.

“We’re not headed there fast enough for a lot of Americans,” the president said. “We’re not headed there fast enough for me, either.”

Overall, the nation’s total payroll actually shrank last month by 125,000, the first decline in six months, the Labor Department said Friday. The loss reflected the end of 225,000 temporary jobs helping the U.S. Census Bureau complete its 10-year head count.

The 83,000 jobs added by the private sector was a better performance than in May, when private job creation nearly stalled. But it fell far short of what the economy needs — at least 200,000 jobs a month — to bring down the unemployment rate.

Nobody, from Obama to Federal Reserve Chairman Ben Bernanke to private economists, expects that anytime soon. And the government has mostly exhausted its realistic options for nudging the economy along faster.

Benchmark interest rates, which at low levels can encourage borrowing to spur economic growth, are already near zero. Republicans in Congress object to additional stimulus spending.

Unemployment is expected to stay above 9 percent through the midterm elections in November. And the Fed predicts joblessness could still be as high as 7.5 percent two years from now. Normal is considered closer to 6 percent, and economists say it will probably take until the middle of this decade to achieve that.

The jobless rate did come down in June from 9.7 percent the month before. But that was mainly because 652,000 people abandoned their job searches.

Even among Americans with secure jobs, confidence is fading. One gauge of consumer confidence fell in June to about 53, down nearly 10 points in a single month. And it’s well below the reading of 90 typically seen in a healthy economy.

On Wall Street, stocks sagged yet again on the news. The Dow Jones industrial average finished down 46 points, its seventh consecutive losing session. The Dow lost more than 10 percent of its value in the second quarter.

Trying to put a positive outlook on the report, Obama said it showed that “we are headed in the right direction.” At the same time, he acknowledged there is a “great deal of work to do to repair the economy and get the American people back to work.”

Comments

jmadison 4 years, 5 months ago

Obama has finally found a way to improve the unemployment rate. "The jobless rate fell to 9.5 percent in June, still far too high to signal a healthy economy. It came in slightly lower than the month before only because more than a half-million people gave up looking for work and were no longer counted as unemployed."

Flap Doodle 4 years, 5 months ago

How's that hopenchage working out for you?

jafs 4 years, 5 months ago

Just curious,

Is there anything Obama and the current administration could have done that you wouldn't have criticized?

Richard Heckler 4 years, 5 months ago

Anyone who was expecting a magic turn around does not have their heads on straight. After Bush-Cheney killed the economy and put 11 million out of work with those jobs not expecting to return. Nope these flag waving industries went outsourcing for slave wages and crummy working conditions. Basically saying to hell with american workers who made them what they are.

It will take at least 11-16 million being put back to work to move the economy forward.

The Obama admin never promised a rose garden. Once all discovered what was going on within the Bush-Cheney admin and a few Wall Street banks it was too late.

All who want to cheer the USA Bush/Cheney invasion and occupation of Afghanistan and Iraq don't expect a recovery soon or new jobs soon. That questionable act is a $4-$5 trillion dollar moneyhole and growing. It is also taking the economy down with it.

There are 30,000 - 40,000 NEW disabled vets thus far as a result in which taxpayers will be supporting these vets and their families which WE should.

Democrats should ignore republicans and get on with creating new jobs and industry. After all the Bush/Cheney government destroyed the economy and 11 million jobs therefore the government restore the economy, The only way to restore an economy is jobs jobs jobs jobs jobs.

If it is okay for one party to destroy jobs and the economy then it has to be okay for the other party to restore the economy and bring america back with jobs jobs jobs jobs jobs. WE USA citizens NEED new industry in order to begin creating new wealth individually and for the nation.

Mixolydian 4 years, 5 months ago

The unemployment rate decreased slightly because ....get this.......

More than half a million people just gave up...just gave up looking for jobs so they no longer count as unemployed.

And Obama says this is a all headed in the right direction.

God help us. 2010 and 2012 can't come soon enough.

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