Employers Shed More Jobs Than Expected in June, Unemployment Reaches 9.5 Percent
The Labor Department reported Thursday that the country shed 467,000 jobs in June, more than the 363,000 that economists had predicted. The job losses were higher than May’s decline of 322,000. Until now the number of monthly job losses had declined every month since January, when they peaked at 741,000.
The losses brought the unemployment rate to a 26-year high of 9.5 percent, up from 9.4 percent in May. Many economists now predict the unemployment rate could pass 10 percent by the end of the year, according to the Washington Post.
A more inclusive measure of unemployment that takes into account part-time workers who want a full-time job, and people who have been discouraged and stopped applying for work, puts the unemployment rate at 16.5 percent.
The job losses occurred in almost all sectors of the economy, including manufacturing, which lost 136,000 jobs, construction, which lost 79,000 jobs, and business and professional services, which lost 116,000 jobs. The only gains were in education and heath care, which gained 34,000 jobs.
Wages remained nearly static, with average weekly pay falling to $611.49 from $613.34.
The numbers show that despite some signs of economic recovery, the nation’s employers have not yet picked up hiring. They also raise questions of whether President Obama’s $787 billion stimulus bill has had its intended effect. Analysts say that much of the economic benefit of stimulus spending on public works projects won’t show up until 2010, according to the Associated Press.
“The stimulus has probably stabilized income, but it has not moved the economy forward,” John E. Silvia, chief economist at the Wachovia Corporation, told the New York Times. “It’s a finger in the dike. But in terms of getting the economy going, there’s no evidence of that yet.”
Meanwhile, the number of long-term unemployed — people who have been unemployed for 27 weeks or more — has tripled since the recession began in December 2007, reaching 4.4 million. The median time people remain out of work had jumped from two to four months.
“We’ve never seen a duration of that magnitude,” Lynn Reaser, vice president of the National Association of Business Economists, told the New York Times. “There are a lot of ramifications. A lot of these people become discouraged and they drop out of the workforce. It affects their spending, their whole psychological frame of mind.”