Today’s Rotten Jobs Report

The official numbers came out today and the nation’s jobless rate held steady at 9.5%. Even though the economy is no longer receding, it’s not growing very quickly at all. The economy needs to grow at a certain pace just to absorb the new workers that enter the workforce. If not, the unemployment rate grows, or at best, it stagnates.
The private workforce grew by 71,000 jobs last month. That’s below expectations and it comes on top of the June number which was revised downward by 31,000. The complete data shows that the economy lost 131,000 jobs in July but that includes many census workers.
The other problem is that many people are simply leaving the job market all together. The seasonally-adjusted size of the civilian workforce is less than what it was in late 2007.

“The private sector is still hobbled and certainly is not nearly strong enough to overcome the drain on the government side,” said Robert A. Dye, senior economist at PNC Financial Services Group in Pittsburgh.
Mr. Dye added that employers were pushing for productivity gains among existing workers, as evidenced by a slight increase in the average workweek for private workers. “I think that many employers are realizing that they can get by with very lean payrolls and are pushing their employees as much as they can and without adding,” he said.
Although the unemployment rate did not worsen, that was in part because people continued to leave the labor force, which means they simply stopped looking for work during the month. In July, 181,000 people left the labor force.

If the employment-to-population ratio were the same as it was 10 years ago, then there would be 13.7 million more jobs.

Posted by on August 6th, 2010 at 10:56 am


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