U.S. Jobs: Down Again

by Tula Connell, Jul 3, 2008

Jobs tanked again in June, with U.S. employers cutting 62,000 jobs, for a sixth consecutive monthly decline, according to the Labor Department today.

The jobless rate remained at 5.5 percent after jumping in May by the most in two decades.

The Labor Department today also issued a report showing initial claims for jobless benefits rose by 16,000 to 404,000 last week.

According to Bloomberg:

The total, higher than economists forecast, brought the four-week average to the highest since October 2005, just after Hurricane Katrina. The total number of people collecting benefits dropped to 3.116 million from 3.135 million.

AFL-CIO President John Sweeney put the jobless into the bigger perspective:

We’ve lost 438,000 jobs so far this year including 62,000 in June alone.  Falling house prices, rising mortgage rates, gas and food prices are squeezing workers as never before.

And he urges Congress and President Bush to act immediately

to help assuage the crushing weight of an economy that was built like a house of cards. We need a second economic stimulus bill that includes extended unemployment benefits, expanded food stamps program, aid to states and cities, and infrastructure spending.

Looks like we won’t be seeing that short economic slump many corporate economists predicted at the beginning of the year.

In fact, there are signs the job situation is worsening. In recent days, the Labor Department reported the number of workers idled by mass layoffs rose to 171,387 in May, marking the third month since the year began that the level has climbed above 150,000, according to figures released June 20 by the Labor Department’s Bureau of Labor Statistics (BLS). Per the Daily Labor Report (subscription required):

Employers conducted 1,626 mass layoff events in May, seasonally adjusted, which BLS said was a “sharp” increase of 318 from April’s 1,308 mass layoffs. The May mass layoffs involved 37,473 more workers than the 133,914 workers who filed initial unemployment insurance claims the previous month, BLS said.

The state of denial and outright obfuscation about our nation’s jobs picture—exemplified as late as this week, in a report released by the out-of-touch Heritage Foundation laughingly titled: “A Good Job Is Not So Hard to Find”—isn’t shared by our neighbors across the pond. The International Monetary Fund (IMF) warned last month that the U.S. economy was likely to stagnate in the second half of this year. The IMF is forecasting no growth at all in the United States this year, measured from the final quarter of 2007 to the final quarter of 2008. From the Financial Times:

The IMF growth forecast is far below the average of private sector and U.S. authorities’ forecasts. The mainstream view at the Federal Reserve—set out in projections in April—is for growth of between 0.3 per cent and 1.2 per cent this year.

To be fair, some U.S. corporate economists are finally calling the nation’s financial mess like it is. Goldman Sachs now forecasts the unemployment rate will peak at 6.4 percent late in 2009 before the picture improves, meaning that the painful process of shedding jobs may be only half-way complete. According to the International Herald Tribune:

“The labor market is clearly deteriorating, and it’s highly likely to keep deteriorating,” said Andrew Tilton, an economist at Goldman Sachs. “It’s clear that the housing downturn and credit crunch are still very much under way. Clearly, there are more jobs to be lost in housing, finance and construction—hundreds of thousands of more jobs to be lost collectively.”

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