Is the Recovery Stuck in Neutral?
That might be the conclusion one could draw given what was contained in the July employment report. Excluding the loss of 143,000 temporary Census 2010 jobs, payrolls registered a meager net increase of 12,000 in July while June’s initial estimate for ex-Census employment was revised significantly lower to only +4,000. Of course, this isn’t the final story since both of these numbers could be revised, but the overall trajectory in net job growth for the past few months has not been particularly reassuring. In addition, the unemployment rate held steady at 9.5 percent, but this was attributed to a shrinking labor force rather than any fundamental improvements in the job market.
The persistence of unemployment remains a large problem for the economy as a whole. Although the average unemployment spell declined by a full-week, jobless workers are still idled an average of more than 34 weeks and 4.3 percent of the labor force (or ~ 6.6 million workers) has been out of a job for 27 weeks or longer. Until job creation picks up and sustains itself at a pace of at least 150K+, the ranks of the unemployed will not shrink and hopes of a stronger recovery will likely be dampened.
08-06-2010 3:58 PM