Storm clouds on the horizon
Today’s jobs report doesn’t paint the picture of a robust economic recovery. After excluding the 225,000 net decline in Census 2010 workers, total payrolls increased by 100,000 during the month of June. Construction and financial activities remained sore spots, shedding nearly 40K on net while health care and temp services represented the strongest sectors in terms of new job creation. Although these recent gains in payrolls represent a significant improvement from the massive declines registered over the course of 2008 and 2009, job growth will have to increase appreciably to make a dent in unemployment. The household survey did show the unemployment rate slip to 9.5 percent in June, but this is an artifact of a contraction in labor force participation rather than new job creation. Indeed, unemployment spells remain abysmally long, with the median length of unemployment rising to 25.5 weeks as more than 45 percent of jobless workers have remained out of work for more than 6 months’ time. Overall, weak readings for economic indicators do not mean a double-dip recession is a foregone conclusion, but they do suggest the risk level has increased in recent weeks.
07-02-2010 12:55 PM