The U.S. economy continued to plod along in July, adding 71,000 private sector jobs, but losing 131,000 jobs overall due to the layoff of temporary Census workers. The unemployment rate held at 9.5 percent.
The numbers from the Bureau of Labor Statistics this morning were not as good as economists were expecting. Surveys of labor market forecasters put the number of new private sector jobs in the range of 90,000 to around 100,000. Only the unemployment rate, which had been estimated to rise to 9.6 percent, was better than expected.
The weak report prompted a weak opening in the stock markets. The Dow started the day down.
Almost all of the jobs lost in July were in government, with 143,000 temporary Census workers laid off. State and local governments and public education also continued to shed jobs; almost 50,000 during the month.
Meanwhile, the BLS sharply revised its June employment report. Instead of the 125,000 job loss in the initial report, the government now says the economy lost 221,000. The private sector added only 31,000, a big difference from the 83,000.
Since the beginning of the year, the economy has gained 630,000 private industry jobs, the BLS says, with about two thirds of the increase coming in the early spring.
Many of those jobs have been in the services area, though manufacturing has also picked up. In July, the sector added 36,000 jobs, most of them in the automotive industry.
However, both construction and financial activities lost jobs. The categories have been the biggest losers since the recession began more than two years ago. Construction lost another 11,000 jobs, while finance, mostly in the real estate, rental, and leasing services area, lost 9,000 jobs.
Although the unemployment rate didn’t change, and the number of persons counted as unofficially unemployed stayed at 14.6 million, the actual numbers of people out of work is several million higher. To be counted as unemployed, you have to actively look for work at some point in the four weeks prior to the government’s monthly survey.
These unincluded are considered marginally attached and in July numbered 2.6 million, about 340,000 higher than in July 2009. Another 8.5 million people are working part time because they can’t find full-time jobs. That number is down 623,000 since April. Why, isn’t entirely clear, though there is some indication from the statistics that some of them have simply given up looking for work entirely and are therefore considered not to be in the workforce.
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Jeff Altman Aug 6, 2010 at 10:02 am
Frankly, the data cannot be reduced to sound bites (or sound bytes) as the media tries to do. The only number that is important is that private sector hiring increased to 70000 new hires, less than what was expected but frankly, the media missed reporting one factor.
In most months, the government includes jobs that they believe were created by small businesses that they cannot prove exist let alone prove the jobs were created. In earlier months, they added in 215000 jobs. July is a month they don’t fudge the figures so this is a pure increase whereas previous months’ were phony.
I would be surprised if many of us did not find a noticeable pickup in our clients’ hiring this year and it will only be better next year.
Public sector, on the other hand will show declines in employment because they were not permitted to experience cuts the past few years that private sector went through because of stimulus money.
After this year, there will be little to prevent state and local government employment cuts from accelerating.
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Paul DeBettignies Aug 6, 2010 at 11:18 am
Jeff,
I agree with you that there has been a noticeable increase in business but that is also relative. It is like saying we went from the ICU and were upgraded to critical, then serious and now maybe fair condition.
We are still in the hospital and will not get out this year.
From my experience we can get a different side of the job market. The unemployment rate for college degreed workers is between 4.5% – 5.0%
I have many companies saying they cannot find enough IT workers (and some other skill sets too) but are still inundated with resumes for other types of jobs.
Two sides to this coin.
I worry that if there is not a broader economic recovery and demand for goods and services that those companies hiring will continue at an anemic pace or worse slow down again.
Most companies have figured out how to work very lean with the employees they have and until they see more demand for what they sell will continue to do what is working while sitting on the cash they have.
My glass half full optimism has a hole in it covered with duct tape and it is starting to drip again.
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