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Employers Cut More Jobs Than Expected in July

Friday, August 06, 2010

What do the Indicators Mean? What do the Indicators Mean? (MC =)

Employers cut more jobs than expected in July as the government reported that the nation’s payrolls shrunk by 131,000 jobs. That's another troubling sign that the recent economic recovery could be stalling.

"The July employment report was disappointing," said Sophia Koropeckyj, managing director at Moody's Economy.com.

While job losses were greater due to 143,000 temporary U.S. Census 2010 jobs that were eliminated, the private sector added just 71,000 positions in July. 

That's anemic at best, and not sustainable for an economy that, prior to the recession, needed an average of 150,000 jobs a month to be created. In 2010, only 93,000 jobs have been created on average each month.

"The best that can be said is it does tell us the economy continues to move forward," said Joel Naroff, president of Naroff Economic Advisers. "Unfortunately, the pace is subpar."

The nation’s unemployment rate--measured in a separate survey--remained unchanged at 9.5 percent. Currently, 14.6 million people are unemployed in the country.

A broader measure of unemployment which includes people who worked part-time while seeking full-time jobs and those too discouraged to even look for work was 16.5 percent.

Those looking for work continue to be unemployed for extended periods of time. Nearly half (44.9 percent) have been without work for more than six months.

And, in another possibly troubling sign, the number of temporary workers hired in July actually fell by 6,000. Employers often bring on temporary workers before hiring full-time employees and, up until July, the number had been positive. 

Unemployment

The number of hours worked per week remains basically unchanged. Employers often pay overtime and increase hours for current employees before hiring. As the increase was only 0.1 hours a week, companies may not be seeing enough business to warrant bringing on new employees.

There were some positive figures in the jobs report. The healthcare sector added 27,000 jobs in July, as did manufacturing, which added 183,000 jobs since December. Manufacturing is often a leading indicator for future economic growth.

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Comments [3]

KatherineCrowley

To me, these statistics are indications that we haven't figured out what the new economy is yet. It's clear that relying on individuals to consume vast quantities of product isn't going to fix the problem. Part of what created the unemployment and economic collapse we're now facing was a mentality regarding spending, credit, and leveraging debt that just won't work anymore. And pointing fingers at either taxes or social injustice doesn't yield an real results. Thank you for laying out the stats. We can all participate in creating jobs if we're willing to work at spotting real growth areas and true economic opportunities.

Aug. 13 2010 12:26 PM
Gerry from NYC

As long as the big corporations, including the banks, refuse to spend their very big stashes of cash on the American people unemployment will remain high. We have to ask why they are refusing to hire - to me it is simple - they figure if unemployment is high we will vote in the Republicans again, who are their friends and allies. They hate Obama, they hate the health care bill, they hate the financial restrictions (as few as they are) imposed on them. Why don't YOU investigate why they aren't hiring - all I hear is conjecture - and I would love some investigation from you.

Aug. 09 2010 08:03 AM
Paul from New York, NY

I'd love to know where the 16.5 percent number comes from. It's an attempt to grasp at a true figure. But I suspect that the powers that be do not want a real figure to come out. It might either force stronger action on the part of the government, would cause perhaps a reverse of the usual trend when employers lay off workers, a lowering a stock prices or it might wake up millions of people to the trouble this country is in.
Tea Party people who advocate for small government are naive to think that their leaders have their best interests at heart.
Must we all be obligated to follow the "sink or swim" model of economics?

Aug. 06 2010 05:40 PM

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