June is sixth straight month of job losses
By DIANE STAFFORD
The Kansas City Star
The national job situation continued to sour in June with a net loss of 62,000 payroll jobs, the government said Thursday.
Private economists warned not to expect a turnaround until 2009.
The grim outlook reflected six straight months of job cuts — a sustained slide that hadn’t occurred since 2001-02 — and an unchanged 5.5 percent unemployment rate, the highest level in four years.
“This statistic was greatly affected by the number of discouraged adults who have left the labor force,” said Peter Morici, an economist at the University of Maryland who follows the labor market. “Factoring in the decline in the number of adults participating in the labor force, the unemployment rate is closer to 7.2 percent.”
Voter surveys indicate the economy is the top concern, and economists said they expect the June jobs report to cause presidential contenders to focus more on the topic.
The U.S. Bureau of Labor Statistics on Thursday also revised upward the job loss numbers initially reported for April and May. U.S. employers cut 52,000 more jobs in those months than first tallied.
Since December, payroll employment has fallen by 438,000 jobs.
Another indicator, also reported Thursday, suggested further upward revisions in jobless numbers can be expected. Initial claims for unemployment benefits rose to 404,000 last week, the U.S. Department of Labor said in a separate report.
That brought the national four-week moving average of new jobless claims to its highest level since October 2005, in the aftermath of Hurricane Katrina.
The statistics bureau’s report for June said Midwest flooding produced “no discernable impact” on the employment or unemployment surveys.
An estimated 8.5 million jobless workers were looking for work last month, compared with 7 million at this time a year ago, when the unemployment rate was 4.6 percent.
The number of long-term unemployed workers (those looking for work for more than 26 weeks) grew to 1.59 million in June, the highest level in three years, the report showed. That group accounts for nearly one in five of the unemployed.
“Thankfully, the recently passed federal extension of unemployment benefits will start reaching Americans this month,” noted Christine Owens, executive director of the National Employment Law Project, which had advocated for the emergency federal benefit extensions.
The largest group of job cuts last month — 51,000 — was in the professional and business services sector, with temporary-help workers representing the lion’s share of that job loss group.
“The temporary help and the larger employment services sectors are both shedding jobs at rapid rates, losing 30,400 and 56,900 jobs, respectively, in June,” said Dean Baker, co-director of the Center for Economic and Policy Research. “These two sectors, which are often seen as harbingers of future employment trends have, respectively, lost 150,000 and 200,000 jobs since January.”
Cutbacks in temporary-help employment typically reflect worsening business conditions and employers’ lack of confidence about improved business conditions going forward.
The second-hardest-hit sector last month was construction, with an estimated 43,000 jobs lost. Construction employment is now down 528,000 jobs since September 2006.
Third worst was the manufacturing sector, which lost 33,000 jobs. That figure would have been higher if about 15,000 striking autoworkers hadn’t returned to their jobs in the month.
Manufacturing employment is down 353,000 since its peak in September 2006.
On the plus side, there were employment gains in education and health (up 29,000), government (also up 29,000, primarily in state and local jurisdictions), and leisure and hospitality (up 24,000, mostly in hotels and restaurants).
Analysts said they don’t expect those gains to continue in the near term. Inflation pressures are likely to hold down health-care hiring, state and local revenue crimps may limit government hiring, and a consumer spending slowdown is expected to reduce hospitality hiring.
The real estate and credit industry collapses have been filtering through the economy for about a year and are expected to continue on that job loss path. But economists this month took special note of service industry slumps.
In a separate report Thursday, the Institute for Supply Management said its services sector index fell to 48.2 in June from 51.7 in May. An index reading below 50 signals no growth.
The institute tracked falling orders and rising costs in the restaurant, hotel, health care, finance, insurance, agriculture, forestry and retail sectors.
The statistics bureau said retailers cut 7,500 jobs in June, with about 4,800 of them at auto dealerships, which have eliminated nearly 26,000 jobs over the past 12 months. The retail sector has cut 194,000 jobs since its peak in March 2007.
May retail sales had shown strength, thanks to consumers who spent their economic stimulus checks, but that bump appears to have been short-lived. Higher prices for food and gasoline, coupled with job loss or fear of job loss, have caused many households to limit discretionary spending.
The jobs report also showed that the number of workers who are working part time because their hours had been cut back or because they couldn’t find full-time jobs has jumped 1.1 million in the past 12 months. That measure now stands at its highest level in 14 years.
Analysts offered little optimism about job market improvement this year. A report from Goldman Sachs forecast that the national unemployment rate will peak at 6.4 percent in late 2009.
<hr class="infobox-hr-separator"> Paycheck growth rate shrivels
Wages in June grew at the slowest pace since September 2005.The majority of the nation’s work force — production and nonsupervisory workers on private, nonfarm payrolls — has seen its average weekly paychecks grow just 2.8 percent in the past 12 months, the U.S. Bureau of Labor Statistics said Thursday.
That nominal gain runs behind the pace of inflation, which means that in real terms, most Americans are now earning less money than they did a year ago.
By DIANE STAFFORD
The Kansas City Star
The national job situation continued to sour in June with a net loss of 62,000 payroll jobs, the government said Thursday.
Private economists warned not to expect a turnaround until 2009.
The grim outlook reflected six straight months of job cuts — a sustained slide that hadn’t occurred since 2001-02 — and an unchanged 5.5 percent unemployment rate, the highest level in four years.
“This statistic was greatly affected by the number of discouraged adults who have left the labor force,” said Peter Morici, an economist at the University of Maryland who follows the labor market. “Factoring in the decline in the number of adults participating in the labor force, the unemployment rate is closer to 7.2 percent.”
Voter surveys indicate the economy is the top concern, and economists said they expect the June jobs report to cause presidential contenders to focus more on the topic.
The U.S. Bureau of Labor Statistics on Thursday also revised upward the job loss numbers initially reported for April and May. U.S. employers cut 52,000 more jobs in those months than first tallied.
Since December, payroll employment has fallen by 438,000 jobs.
Another indicator, also reported Thursday, suggested further upward revisions in jobless numbers can be expected. Initial claims for unemployment benefits rose to 404,000 last week, the U.S. Department of Labor said in a separate report.
That brought the national four-week moving average of new jobless claims to its highest level since October 2005, in the aftermath of Hurricane Katrina.
The statistics bureau’s report for June said Midwest flooding produced “no discernable impact” on the employment or unemployment surveys.
An estimated 8.5 million jobless workers were looking for work last month, compared with 7 million at this time a year ago, when the unemployment rate was 4.6 percent.
The number of long-term unemployed workers (those looking for work for more than 26 weeks) grew to 1.59 million in June, the highest level in three years, the report showed. That group accounts for nearly one in five of the unemployed.
“Thankfully, the recently passed federal extension of unemployment benefits will start reaching Americans this month,” noted Christine Owens, executive director of the National Employment Law Project, which had advocated for the emergency federal benefit extensions.
The largest group of job cuts last month — 51,000 — was in the professional and business services sector, with temporary-help workers representing the lion’s share of that job loss group.
“The temporary help and the larger employment services sectors are both shedding jobs at rapid rates, losing 30,400 and 56,900 jobs, respectively, in June,” said Dean Baker, co-director of the Center for Economic and Policy Research. “These two sectors, which are often seen as harbingers of future employment trends have, respectively, lost 150,000 and 200,000 jobs since January.”
Cutbacks in temporary-help employment typically reflect worsening business conditions and employers’ lack of confidence about improved business conditions going forward.
The second-hardest-hit sector last month was construction, with an estimated 43,000 jobs lost. Construction employment is now down 528,000 jobs since September 2006.
Third worst was the manufacturing sector, which lost 33,000 jobs. That figure would have been higher if about 15,000 striking autoworkers hadn’t returned to their jobs in the month.
Manufacturing employment is down 353,000 since its peak in September 2006.
On the plus side, there were employment gains in education and health (up 29,000), government (also up 29,000, primarily in state and local jurisdictions), and leisure and hospitality (up 24,000, mostly in hotels and restaurants).
Analysts said they don’t expect those gains to continue in the near term. Inflation pressures are likely to hold down health-care hiring, state and local revenue crimps may limit government hiring, and a consumer spending slowdown is expected to reduce hospitality hiring.
The real estate and credit industry collapses have been filtering through the economy for about a year and are expected to continue on that job loss path. But economists this month took special note of service industry slumps.
In a separate report Thursday, the Institute for Supply Management said its services sector index fell to 48.2 in June from 51.7 in May. An index reading below 50 signals no growth.
The institute tracked falling orders and rising costs in the restaurant, hotel, health care, finance, insurance, agriculture, forestry and retail sectors.
The statistics bureau said retailers cut 7,500 jobs in June, with about 4,800 of them at auto dealerships, which have eliminated nearly 26,000 jobs over the past 12 months. The retail sector has cut 194,000 jobs since its peak in March 2007.
May retail sales had shown strength, thanks to consumers who spent their economic stimulus checks, but that bump appears to have been short-lived. Higher prices for food and gasoline, coupled with job loss or fear of job loss, have caused many households to limit discretionary spending.
The jobs report also showed that the number of workers who are working part time because their hours had been cut back or because they couldn’t find full-time jobs has jumped 1.1 million in the past 12 months. That measure now stands at its highest level in 14 years.
Analysts offered little optimism about job market improvement this year. A report from Goldman Sachs forecast that the national unemployment rate will peak at 6.4 percent in late 2009.
<hr class="infobox-hr-separator"> Paycheck growth rate shrivels
Wages in June grew at the slowest pace since September 2005.The majority of the nation’s work force — production and nonsupervisory workers on private, nonfarm payrolls — has seen its average weekly paychecks grow just 2.8 percent in the past 12 months, the U.S. Bureau of Labor Statistics said Thursday.
That nominal gain runs behind the pace of inflation, which means that in real terms, most Americans are now earning less money than they did a year ago.
