Jobs Report Shows Recovery May be Losing Steam
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JEFFREY BROWN: The U.S. economy lost jobs overall last month, even as the jobless rate was declining. The numbers were the latest sign that the recovery may be losing momentum.
Private employers managed to add 83,000 jobs in June, but it wasn’t enough. The economy still recorded a net loss of 125,000 jobs, as the Census Bureau laid off more of the temporary workers it hired last spring.
Labor Commissioner Keith Hall offered this perspective at a congressional hearing this morning.
KEITH HALL, commissioner, Bureau of Labor Statistics: And although the — the private-sector job growth wasn’t strong, it was job growth, and it has been growing now for six straight — six straight months. So, I think, in context, that’s a positive sign.
And then temporary help work continues to add jobs, and has added quite a few jobs. And that continues to be a good sign for generally future growth, I think, in employment.
JEFFREY BROWN: Indeed, the unemployment rate actually fell last month to 9.5 percent, the lowest in nearly a year. But that was because 652,000 people gave up looking for work, so they were no longer counted as unemployed.
President Obama, preparing to leave for Senator Robert Byrd’s funeral, echoed a point he’s been making for the past few months.
U.S. PRESIDENT BARACK OBAMA: Now, make no mistake. We are headed in the right direction. But, as I was reminded on a trip to Racine, Wisconsin, earlier this week, we’re not headed there fast enough for a lot of Americans. We’re not headed there fast enough for me either.
JEFFREY BROWN: And there were other signs of a slower road ahead. Factory orders in May fell 1.4 percent, the worst showing in nine months, and housing contracts fell 30 percent in May.
In the meantime, some 14 million Americans are still hunting for work.
WOMAN: Basically trying to find a job. I need a job bad.
JEFFREY BROWN: And some face new pressure. Congress left today for a two-week holiday recess without agreeing to extend jobless benefits through November. A bill pegged at nearly $34 billion passed the House yesterday, but Republicans in the Senate blocked it.
House Speaker Nancy Pelosi said Americans will know who’s to blame when the checks stop coming.
REP. NANCY PELOSI, D-Calif., speaker of the House: But I think it’s important to note that the Republican senators, the Republicans in the Senate have stopped unemployment benefits from going to people who have lost their jobs, through no fault of their own. It’s just cruel.
JEFFREY BROWN: Senate Republican Leader Mitch McConnell insisted his side is acting out of principle.
SEN. MITCH MCCONNELL, R-Ky., minority leader: We can’t support job-killing taxes and adding tens of billions to the already unsustainable national debt. So, the only reason the unemployment extension hasn’t passed is because our friends on the other side simply refuse to pass a bill that doesn’t add to the debt. That’s it.
JEFFREY BROWN: So far, 1.3 million people have reached the end of their benefits. Another 200,000 or more will join that list every week.
JEFFREY BROWN: And we turn first to what the latest jobs numbers tell us. For that, I’m joined by Catherine Mann, professor of economics at the Brandeis University International Business School. She joins us from Boston.
Catherine Mann, private sector hiring up, but not very much. What does that tell you?
CATHERINE MANN, professor of economics, Brandeis University International Business School: Well, you know, this is really a picture of a struggling economy. When you have job gains of maybe 10,000 in one sector or 10,000 in another sector, it’s really not enough to put a dent in the amount of — number of people of unemployed.
As stated in the opening segment, you know, the only reason why the unemployment rate fell was because 650,000 people left the labor force. They’re not even looking anymore. So, this really is not a good picture for the economy.
You know, at this rate of job creation over the last six months, it would take us a decade to add back the jobs that were lost so far in this recession.
JEFFREY BROWN: You mentioned the various sectors. Are there any bright spots?
CATHERINE MANN: You have to look very hard.
CATHERINE MANN: Leisure and hospitality, 28,000 — 27,000 people employed, but, you know, that’s offset by 22,000 in construction having lost their jobs, a couple of sectors, businesses services and so forth, you know, in double digits, 17,000 and so forth.
But, again, these are very small numbers for an economy of our size. They don’t represent…
JEFFREY BROWN: And…
CATHERINE MANN: They don’t represent growth in employment if you look at the overall picture.
JEFFREY BROWN: And just to parse it a little bit more, what about any differences that might jump out at you for men — men and women, by age, or minorities? What do you see there?
CATHERINE MANN: Well, women continue to have a better situation facing them. Their unemployment rate is about 2 percentage points lower, at 7.5 percent, as opposed to above 9 percent for adult men.
So women are better off. But across other categories in terms of the age bracket, sort of the high-income earning years, the middle-aged person is not doing as well. They are not coming back into the labor force. And, of course, those are, generally speaking, the highest earning years of your life.
So, for many of these workers, the ones who lose their jobs permanently, it will be very, very difficult to get back on track to earn the kind of — you know, in your high income earning years, to support retirement and so forth.
You know, in fact, half of the people who are unemployed have been unemployed for more than six months. And getting those people back into the job market, back with the set of skills that are appropriate to what jobs might be appearing in the next six months, that’s a huge challenge.
JEFFREY BROWN: All right, well, let me ask you finally just to fit these numbers into what we have been seeing over the past few months. There was a point not that long ago when things were beginning to look up, and then we have been watching very carefully month by month.
There are people who have talked about the possibility of a double-dip recession. Try to give us the larger picture here.
CATHERINE MANN: Well, you know, from the standpoint of the employment situation, I would argue that we haven’t really ever gotten out of the dip part. There’s been very little employment growth.
So, the notion of a double dip, a worsening situation from this labor market situation, probably is unlikely, in the sense that, even though employers aren’t hiring anymore, they’re really — or hiring very little — they’re really not in a position to fire anybody either, because they are trying to produce more.
They are producing a little bit more. In manufacturing, for example, they are producing more and in some of these other areas. Production continues, GDP growth is positive, but they’re doing it with the same number of workers. And that’s what — that is what we’re going to see continuing on for some time.
JEFFREY BROWN: All right, Catherine Mann, thank you very much.
CATHERINE MANN: Wish I could be more positive.
JEFFREY BROWN: All right. We will try you again next time.