U.S. jobs dip, jobless rate holds at 9.5%
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The national unemployment rate remained at 9.5 percent for July, an indication that any growth in the economy is not percolating into new jobs.
"The labor market is stuck in neutral," said Heidi Shierholz, an economist with the Economic Policy Institute, a Washington D.C.-based policy research firm.
The country lost 131,000 jobs during the month, according to the Bureau of Labor Statistics which released July's employment report Friday.
July's report, the third in a row that showed little or no economic growth in terms of jobs, disappointed investors. Stock prices sank, driving the Dow Jones industrial average down 160 points at one point. The Dow rallied late in the day to end up down 21 points.
Ms. Shierholz said July's report added to concerns about the strength of the recovery.
"January through April we had this appearance that there's some momentum, maybe things will improve faster than we thought; but any hope of that has completely evaporated," she said.
Economists spent much of Friday explaining that the only reason the unemployment rate did not rise in July was because more workers were sitting on the sidelines and waiting for the economy to improve before they step back into the labor market. People are counted as unemployed if they are without work and actively looking for a new job. Those who have not looked for work during the month are not considered part of the labor market.
While the unemployment rate remained unchanged in July, the labor force -- those people who are working or actively looking for work -- contracted by 181,000 workers. If those workers had remained in the job market, the unemployment rate would have risen to 9.6 percent, Ms. Shierholz said.
"It's very discouraging," said Christine Owen, the executive director of the National Employment Law Project.
July was actually better than May and June for the contraction of the labor force. In May, she said, the number of people who were working or looking for work fell by 322,000, and in June there were 652,000 people who dropped out of the labor market.
"It's a deep hole," she said.
One problem, she said, is no one is putting money into the economy to hire people.
"Corporations have plenty of money. They're sitting on $1.8 trillion, and their profits are up. But they're not adding to their work forces," Ms. Owen said. "I think the economy has to have a whole lot more stimulus."
The bureau's report showed that the number of people who are counted as the long-term unemployed, those who have been looking for work for more than six months, fell by 100,000 to 6.6 million people, which is 44.9 percent of the people who are currently unemployed, down from 45.5 percent in June.
That slight decline in the long-term jobless rate means that either workers are finding jobs more quickly or that more people who have been out of the labor force for a long time have stopped looking for work.
Ms. Owen said one of the questions the Bureau of Labor Statistics data does not answer is what happened to the people who have dropped out of the labor market. They may have gone to school, stayed at home depending on a relative's income, retired early or are working under the table.
The bureau's survey of establishments, including governments, showed that state, local and federal governments shed a combined 202,000 jobs during July, including the jobs that had been created to conduct the U.S. Census. At the height of the census, there were 143,000 people filling those jobs.
Employment in the construction industry fell by 11,000 jobs, but manufacturing added 36,000 jobs, including 9,100 in fabricating metal products. Employment in temporary help services, which had been hailed by economists as the precursor to adding full-time jobs, fell by 5,600, with overall administrative and support service jobs taking a hit of 16,300 workers.
Health care and social services continued to grow as an employment sector, adding 27,800 jobs in July.
First Published August 7, 2010 12:00 am