Jobs Report Shows Economy Struggling to Gain Footing

The U.S. economy added 83,000 private sector jobs in June, on the low end of what economists had been expecting, but evidence, nonetheless, that payrolls are continuing to grow.

The news was tempered by the loss of 225,000 temporary census jobs, and continuing cuts to state and local government payrolls, which resulted in a net loss of 125,000 jobs in June.

Even the decline in the unemployment rate to 9.5 percent from May’s 9.7 percent was tempered. Ordinarily good news, much of the reason for the decline appears to come from the fact that some of the unemployed had simply given up looking for work. The U.S. Bureau of Labor Statistics, which released the June employment report this morning, counts only people actively seeking in the previous four weeks as being unemployed.

Against the context of other economic news, including Thursday’s higher-than-expected numbers for first time unemployment claims, the BLS report shows an economy struggling to gain traction.

Since the beginning of the year, the private sector has added almost 600,000 jobs. To reduce the national unemployment rate by any significant amount, economists say 150,000 jobs a month will need to be created. That pace of hiring hasn’t been seen since the fall of 2007.

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Still, there were indications that even though employers weren’t willing to commit, they continued to date, hiring another 21,000 temporary workers. It’s a sign that business is improving, at least enough to bring in additional workers.

On the other hand, the workweek decreased slightly for all private, non-farm workers by .1 hours to 34.1 hours. The manufacturing workweek declined by .5 hours to 40 hours even. It had risen in May by .4 hours.  Hourly pay for private non-farm workers decreased by two cents to $22.53. It had been rising in all but one of the last 12 months.

The Dow Jones and other stock market indices seemed to have expected the news. Prices were flat to slightly up in the first minutes after trading began this morning.

John Zappe is the editor of TLNT.com and a contributing editor of ERE.net. John was a newspaper reporter and editor until his geek gene lead him to launch his first website in 1994. He developed and managed online newspaper employment sites and sold advertising services to recruiters and employers. Before joining ERE Media in 2006, John was a senior consultant and analyst with Advanced Interactive Media and previously was Vice President of Digital Media for the Los Angeles Newspaper Group.

Besides writing for ERE, John consults with staffing firms and employment agencies, providing content and managing their social media programs. He also works with organizations and businesses to assist with audience development and marketing. In his spare time  he can be found hiking in the California mountains or competing in canine agility and obedience competitions.

You can contact him here.

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4 Comments on “Jobs Report Shows Economy Struggling to Gain Footing

  1. Economic Forecasts last updated: 07/29/2010
    http://web.rollins.edu/~wseyfried/forecast.htm/

    Recent Forecasts

    Associated Press Survey (July 2010): economic growth in 2010 to be less than 3%; unemployment declines to 9.5% by end of 2010, doesn’t decline to 5% until at least 2015; Fed starts to raise rates in Spring 2011

    Quarterly economic survey (USA Today – July 2010): economic growth = 2.5% in second half; unemployment = 9.5% at end of 2010; don’t recover jobs lost until at least 2014

    OMB (July 23, 2010 – see p9): economic growth (end of year comparisons) = 3.1% in 2010, 4% in 2011; unemployment = 9.6% in 2010, 8.7% in 2011 (declines to 6% at the end of 2014); inflation = 1% in 2010, 1.6% in 2011; natural rate of unemployment = 5.2%, growth in potential GDP = 2.5%

    Economic forecasting survey, July 2010 (WSJ): economic growth = 2.9% in 2010 (2.8% in second half), 3% in 2011; unemployment at 9.4% at end of 2010, 8.6% at end of 2011; inflation = 1.3% in 2010

    Fed Forecast as of June 23, 2010: economic growth = 3% to 3.5% in 2010, 3.5-4.2% in 2011 and 3.5-4.5% in 2012 (note: these are from 4th quarter to 4th quarter while other forecasts compare yearly averages); unemployment rate = 9.2 to 9.5% in 2010, 8.3-8.7% in 2011 and 7.1-7.5% in 2012 (estimates are for 4th quarter of the respective year); natural rate of unemployment = 5 to 5.3% (range = 5 to 6.3%); inflation as measured by core PCE index of 0.8% to 1% in 2010, 0.9 to 1.3% in 2011 and 1 to 1.5% in 2012

    Wells Fargo Securities Economic Forecast (latest forecast: July 2010): economic growth 3.2% in the second quarter of 2010, 1.6% in 3rd quarter, 2.2% in fourth quarter and 2.3% in 2011; core PCE inflation = 1.2% in 2010 and 1.6% in 2011; unemployment rate rises to 9.8% in the third quarter of 2010; declining to 9.4% in the fourth quarter of 2011 (sustained job growth of 100,000+ per month begins in fourth quarter); Fed begins to raise interest rates in 3rd quarter of 2011

    Bloomberg (July 2010): economic growth = 2.8% from summer 2010 to summer 2011; economic growth = 2.9% in 2011; unemployment averages 9.6% in 2010 and 9.1% in 2011; core PCE inflation = 1.1% in 2010; Fed begins to raise rates in second quarter 2011 with the federal funds rate rising to 0.75% by summer 2011

    IMF (July 2010): includes global forecasts; US economic growth = 3.3% in 2010, 2.9% in 2011

    Morgan Stanley (July 2010): economic growth = 3.25% in second half of 2010

    Univ. of Michigan Economic Forecast (executive summary – June 2010): economic growth = 2.7% in second half of 2010, 3% in 2011; core inflation (CPI) = 0.9% in 2010 and 1.2% in 2011; unemployment rate 9.7% in 2010 and 9% by end of 2011

    ABA forecasting survey (June 2010 – WSJ): economic growth = 3.2% in 2010, 3% in 2011; unemployment rate declines to 8.5% by end of 2011; inflation remains low; Fed starts raising rates in 2011 (1.5% federal funds rate by end of 2011)

    Livingston Survey (latest survey – June 2010): economic growth = 3.3% for the second half of 2010, 3% for the first half of 2011; unemployment rate = 9.5% in Dec 2010 and 9.1% in June 2011; inflation (CPI) = 1.8% for 2010 and 1.7% for 2011

    OECD forecast: economic growth = 3.2% in 2010 and 2011; unemployment rate 9.6% by end of 2010, 8.4% by end of 2011, inflation =1.6% in 2010 and 1% in 2011

    NABE consensus forecast: May 2010 (haver): economic growth = 3.2% in 2010 and 2011; unemployment = 9.6% by end of 2010 and 9% in 2011; ; core PCE inflation = 1.3% in 2010, 1.7% in 2011

    Survey of Professional Forecasters (latest survey May 2010): economic growth = 3.3% in 2010, 3.1% in 2011, 3.2% in 2012; core inflation (PCE) = 1.2% in 2010, 1.6% in 2011 and 1.8% in 2012 (overall PCE inflation = 1.4% in 2010, 1.8% in 2011, 2% in 2012); unemployment rate = 9.5% in fourth quarter 2010; average unemployment rate = 8.9% in 2011, 8% in 2012

    CBO (Jan 2010): note – assumes all Bush tax cuts expire and other policy changes that are unlikely (need to make forecast assuming current policy; results in weaker forecast); economic growth (end of year comparisons) = 2.1% in 2010, 2.4% in 2011; unemployment = 10% in fourth quarter 2010, 9.1% in 2011Q4, core PCE inflation = 1% in 2010, 0.9% in 2011; growth in potential GDP = 2.1% during next 5 years before rising to 2.4% from 2015-2020

    Commentaries on Economic Conditions
    Beige Book (Fed)
    Haver Analytics: up-to-date commentary on recently released economic data
    Current Economic Data

    Economy at a Glance (BLS): Orlando Metropolitan Area; Florida
    Economic Calendar (Briefing.com)

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