Economy Loses 131K Jobs in July
WASHINGTON (AP) – Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months. The jobless rate was unchanged at 9.5 percent.
The Labor Department said Friday that companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate.
Overall, the economy lost a net total of 131,000 jobs last month, but that was mostly because 143,000 temporary census jobs ended.
Stock futures fell after the report's release. Futures for the Dow Jones industrial average were up 30 points before the announcement, but are now down 70 points.
The department also said that businesses hired fewer workers in June than it had previously estimated. June's private-sector job gains were revised down to 31,000 from 83,000. May was revised up slightly to show 51,000 net new jobs, from 33,000.
The “underemployment” rate was the same as in June, at 16.5 percent. That includes those working part time who would prefer full-time work and unemployed workers who've given up on their job hunts.
All told, there were 14.6 million people looking for work in July. That's roughly double the figure in December 2007, when the recession began.
Even if hiring picks up, it will take years to regain all the jobs lost during the recession. The economy lost 8.4 million jobs in 2008 and 2009. This year, private employers have added only 559,000 jobs.
Friday's report is being closely watched by the Federal Reserve as it considers ways to energize the recovery. The report will likely put pressure on the Fed to take new steps to boost the economy and keep interest rates at record lows when it meets next week.
Without more jobs, consumers won't see the gains in income needed to encourage them to spend more and support economic activity. Even those with jobs may not feel confident enough to ramp up their spending.
That's important because many of the trends driving economic growth earlier in the recovery are fading. Companies boosted production in the winter and spring to rebuild inventories that were depleted in the recession. But that boost is fading. And the impact of the federal government's stimulus package is also declining.
The economy grew at 5 percent in the fourth quarter last year and 3.7 percent in the first three months of 2010. But that slowed to 2.4 percent in the April-June period. That's not fast enough to generate jobs and reduce the unemployment rate.
Many companies appear to be getting more out of their current employees rather than adding new staff. The average work week increased by one-tenth of an hour to 34.2 hours, the department said. That's up from about 33 hours in the depths of the recession.
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