The pace of job losses slowed more than analysts predicted, offering the best indication yet that the suffering economy may be turning a corner.
“The American consumer is by no means out of the woods, but we are moving in the right direction,” Richard DeKaser, chief economist at Woodley Park Research in Washington, told Bloomberg, which identified DeKaser as the only economist to correctly forecast the latest unemployment numbers.
U.S. employers cut 247,000 jobs in June, compared to 443,000 in June and 303,000 in May. (The numbers for both May and June were revised down recently.) The average paycheck also grew slightly after a period of stagnation, and the number of hours workers logged also increased slightly, according to the report released Friday by the Labor Department.
“The basic message is that the rate of job cuts is diminishing, and that’s good news,” Nariman Behravesh, chief economist at IHS Global Insight, told the New York Times. “Still you’re seeing job cuts everywhere except education, health care, government. I don’t think we’re at bottom yet in employment.”
The total U.S. unemployment rate reached about 14.5 million in July. About 6.7 million of those job losses have occurred since the recession began in December 2007.
Perhaps most strikingly, the Labor Department report put the number of long-term unemployed – those jobless for 27 weeks or more – at 5 million, nearly 600,000 higher than in June. According to the report, “1 in 3 unemployed persons were jobless for 27 weeks or more” last month.
“Compared with a year ago, 3.3 million additional workers have been unemployed for six months or longer, says Gary Burtless, an economist with the Brookings Institution in Washington, D.C. “For the United States, that really is an appalling number.”
Burtless also discussed how the hardest-hit states are paying for the dramatic rise of people on their unemployment rolls: