Bad news! Another 467,000 jobs were lost according to the latest report. This is much worse that last month's loss of 322,000, and brings into question whether the stimulus programs are working to jump-start the economy. Obviously they are not doing the job. The unemployment rate rose to 9.5% from 9.4%.
Analysts had expected a much better report. Alan Ruskin of RBS Greenwich Capital said: "if you were betting on the U.S. driving a vigorous recovery, think again. ... The unemployment report can largely be taken at face value, and the face value story is a labor market that is not improving nearly as rapidly as the May data suggested."
A separate report showed that the number of persons claiming jobless benefits dropped slightly by 16,000 to 614,000. However this figure could be misleading because it simply showed the number of persons who had used up their unemployment and that reduced the count by 16,000.
Since the recession began 6.5 million jobs were lost. That's the official number. The real number is perhaps much higher since many people have given up looking for work or have used up all their unemployment benefits.
For specific industries, manufacturing lost 136,000 jobs, business services 118,000, and construction 79,000. Car dealerships cut 9,000 jobs and car parts companies shed 27,000. Only education and health services added jobs.
Last week the minutes of the Federal Open Market Committee issued this statement: " the pace of economic contraction is slowing" but that household spending remains "constrained by ongoing job losses, lower housing wealth and tight credit."
To summarize, this months' data is worse than last month, indicating that the economy is still deteriorating. All the reports of bits of improvement here and there does not change the big picture and the big picture is still gloomy.
Do you see unemployment rising in your area?
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Reader Comments (Page 1 of 1)
7-15-2009 @ 11:02AM
Greg said...
I've heard arguments when making similar discussions that unemployment figures are a bad indicator for the condition of the economy. I agree with your assessment, however, that in this case, having lost all of the job growth in six months that we gained in nine years of expansion, that unemployment is and will continue to be a good indicator of our economic deterioration. Also, I think that the numbers divorce us from considering real human issues, such as people running out of unemployment assistance, which will spur the next political movement in this country. We'll see how it shapes up.
To see my thoughts in a more extended fashion, see my blog at gregfreed.wordpress.com. Language may be offensive in some posts.