A job fair in Plano, Texas in July.
With the American economic recovery hanging in the balance, private employers were unable to add enough jobs in July to overcome the departure of thousands of temporary Census workers as well as people laid off by cash-strapped state and local governments.
|
|
Private employers added 71,000 jobs last month, less than half the 143,000 lost as the Census wound down, and about half the number that economists generally say is needed to simply accommodate population growth. The unemployment rate remained unchanged at 9.5 percent.
Over all, the end of the Census jobs contributed to the nation losing 131,000 jobs in July, according to the Department of Labor's monthly statistical snapshot of hiring. The Department dramatically revised its number for June down to a loss of 221,000 jobs. The agency originally reported that 125,000 jobs were lost in June. Private sector hiring in June, originally reported at 83,000, was revised downward to 31,000.
Figures released last week confirmed that the American economy slowed in the spring, and the Labor Department's numbers pointed toward a hiring stall this summer. With more than 8 million people having lost their jobs during the recession, such tepid job growth cannot begin to plug the hole.
"The private sector is still hobbled," said Robert A. Dye, senior economist at PNC Financial Services Group in Pittsburgh, "and certainly is not nearly strong enough to overcome the drain on the government side."
Many economists were surprised by the scale of layoffs at by state and local governments, which combined to cut 48,000 jobs in July. In the last three months, state and local governments have shed 102,000 jobs.
Although the unemployment rate did not worsen, that was in part because people continued to leave the labor force, which means they simply stopped looking for work during the month.
With some economists now talking about "double dip" recession, the political stakes for the Obama administration have been rising as the weeks tick closer to the midterm elections.
In remarks made while visiting Gelberg Signs, a small business in Washington, President Obama acknowledged the slow and uneven pace of the recovery.
"The road to recovery doesn't follow a straight line," he said. "Some sectors bounce back faster than others. So what we need to do is push forward. We can't go backwards."
Friday's jobs report renewed pressure on lawmakers to consider the next steps they might take to bolster the economy.
The Senate voted earlier this week to approve a $26 billion package of aid to states and school districts, and the House is expected to vote on the measure on Tuesday. Still to come is a fierce debate over whether to let the tax cuts for the wealthy enacted under President George W. Bush expire at the end of the year.
Recent indicators focusing on consumer confidence, retail sales and housing appear to put the economy in a holding pattern.
Earlier this week, a crucial index of manufacturing showed that growth had slipped slightly in July, chain stores reported anemic increases in sales and unemployment claims rose above the level usual for this stage of a recovery. On the more positive side, auto sales increased 5.1 percent in July compared with a year earlier, although from a very low base.
For now, companies appear nervous about expanding their payrolls. "Businesses just don't want to hire," said Allen Sinai, chief global economist at Decision Economics. "Workers are too costly and it's very easy to substitute technology for labor."
He added that with corporate earnings rising partly on the back of cost-cutting, employers are reluctant to give up profits. "So while corporate earnings were spectacular," Mr. Sinai said, "the job market just stinks."
July's labor numbers showed that the average weekly hours worked in private-sector jobs ticked up to 33.5 hours from 33.4 hours in June, suggesting that employers were pushing for productivity gains among existing employees. Optimistic economists say that usually presages hiring as companies max out existing workers.
For now, though, companies are hesitating to expand. "I think that many employers are realizing that they can get by with very lean payrolls," Mr. Dye said. "And they are pushing their employees as much as they can without adding."
Another disappointing sign was that firms that hire temporary help cut 6,000 jobs in July. Temporary hiring is usually a precursor to more permanent job creation.
Manufacturing, which has recently been a bright spot in hiring, adding 36,000 jobs in July. That was in part because automakers that usually close factories during the month kept plants open.
The losses at the state and local government level overshadowed that growth, and economists pointed out that even if the House approves the Senate state aid bill, it will only help stave off further layoffs, not induce hiring.
"In an economy where the private sector isn't hiring, it's natural to look for government to pick up employment," said Andrew Stettner, deputy director of the National Employment Law Project. "There are a lot of positive things that government does and could do with more bodies, but the opposite thing is happening."
Click here to continue reading.
SOURCE: The New York Times
