Employers shed 247,000 jobs in July, the government said Friday
morning, a better-than-expected report that marked the best
performance since last August and adds to the growing signals that
a long, deep recession may be drawing to a close.
By Kevin G. Hall, McClatchy Newspapers
WASHINGTON
Employers shed 247,000 jobs in July, the government said Friday morning, a better-than-expected report that marked the best performance since last August and adds to the growing signals that a long, deep recession may be drawing to a close.
The Labor Department also reported that the nation’s unemployment rate fell to 9.4, an improvement of a tenth of a percentage point and the first drop in the rate since April 2008.
In another move that augurs well for the economy, statisticians revised earlier reports, saying that job losses in the previous two reporting periods weren’t as bad as first reported. Losses in May and June were revised to 303,000 and 443,000, respectively, from 322,000 and 467,000.
Mainstream economists had been expecting around 320,000 lost jobs for July and an uptick in the unemployment rate. Along with the better-than-expected economic growth numbers released last month, it all points to an economy that’s on its way back up amid 19 consecutive months of job losses.
“The case that the recession ended in June continues to grow with this report,” the forecasting group RDQ Economics in New York said in a note to investors.
Stocks, which anticipate the economy months ahead, have rallied in recent months, and that’s added to a feeling that the worst is over. Grim signs of recession still abound, however, from depressed consumer confidence to poor retail sales and a dip in a closely watched manufacturing index after months of improvement.
Friday’s Bureau of Labor Statistics report also offered a sober reminder that even if things are getting better, they’re still bad.
“In July, job losses continued in many of the major industry sectors,” the bureau said.
Employment in construction fell by 76,000 in July, manufacturers lopped off another 52,000 jobs and retailers shed another 44,000, while employment in professional and business services fell by 38,000 posts. Transportation and warehousing lost 22,000 jobs in July and financial services 13,000.
The only sector that added a significant number of jobs was health care, which saw employment increase by 20,000 jobs last month. Government employment increased by 7,000 posts, a good sign since it means that the employment improvement economy-wide in July was driven by the private sector, not by government hiring.
In another nugget of good news, the Labor Department reported that the average workweek of production nudged up by 0.1 hour to 33.1 hours. The manufacturing workweek increased by 0.3 hour to 39.8 hours. The average hourly earnings of production and nonsupervisory workers rose by 3 cents, or 0.2 percent, to $18.56. Those are signs that workers’ well-being is improving, even if only slightly.
Over the past 12 months, the BLS statisticians said, average hourly earnings have increased by 2.5 percent, while average weekly earnings have risen by only 1.0 percent because of declines in the length of the average workweek. Many employers trimmed the workweek in order to retain workers, paying them less but keeping them employed.
Some analysts attributed the improving outlook to the government’s $787 billion economic stimulus plan, which was designed to create jobs and spark spending.
“The pace of job losses over the last three months, 314,000, are less than half that of the prior three months, over 600,000, for only one reason: the stimulus package’s impact on personal incomes and state and local spending,” said Lawrence Mishel, the president of the Economic Policy Institute, a liberal policy-research group. “Obviously, we are not out of the woods yet and must confront continued job losses and a sluggish recovery.”
In a prepared statement before the Joint Economic Committee of Congress on Friday, the Bureau of Labor Statistics commissioner, Keith Hall, suggested that there was still plenty of pain in the work force even as the broad numbers improve.
“The number of long-term unemployed continued to rise. In July, 5.0 million people had been unemployed for more than six months, accounting for one in three unemployed persons,” he said. “The employment-population ratio was 59.4 percent in July. The ratio has fallen by 3.3 percentage points since the recession began. Among the employed, there were 8.8 million persons working part time in July who would have preferred full-time work.”
