Hiring slow for 3rd straight month
Fri, 06 Aug 2010 10:33:02 GMT —
WASHINGTON (AP) " Private employers hired workers at a weak pace for the third straight month, making it likely that economic growth will slow further in the coming months. The jobless rate was unchanged at 9.5 percent.
Companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate.
Overall, the economy lost a net total of 131,000 jobs last month, the Labor Department said Friday, mostly because 143,000 temporary census jobs ended.
Investors reacted by selling stock futures and shifted into safer investments such as Treasury bonds. The yield on the 10-year Treasury note, which helps set interest rates on mortgages and other consumer loans, fell to 2.87 percent from 2.91 percent late Thursday.More economic news: Geithner favors allowing some tax cuts to expire White House predicts record $1.47 trillion deficit Visit our Money section
The department also revised down its jobs figures for June, saying businesses hired fewer workers than previously estimated. June's private-sector job gains were lowered to 31,000 from 83,000. May's were raised slightly to show 51,000 net new jobs, up from 33,000.
The "underemployment" rate was the same as in June, at 16.5 percent. That includes those working part time who would prefer full-time work and unemployed workers who've given up on their job hunts.
All told, there were 14.6 million people looking for work in July. That's roughly double the figure in December 2007, when the recession began.
Even if hiring picks up, it will take years to regain all the jobs lost during the recession. The economy lost 8.4 million jobs in 2008 and 2009. This year, private employers have added only 559,000 new hires.
Friday's report is being closely watched by the Federal Reserve as it considers ways to energize the recovery. The report could persuade the Fed to take new steps to boost the economy and keep interest rates at record lows when it meets next week.
Without more jobs, consumers won't see the gains in income needed to encourage them to spend more and support economic activity. Even those with jobs may not feel confident enough to ramp up their spending.
That's important because many of the trends driving economic growth earlier in the recovery are fading. Companies boosted production in the winter and spring to rebuild inventories that were depleted in the recession. But that boost is fading. And the impact of the federal government's stimulus package is also declining.
The economy grew at 5 percent in the fourth quarter last year and 3.7 percent in the first three months of 2010. But that slowed to 2.4 percent in the April-June period. That's not fast enough to generate many jobs and reduce the unemployment rate.
Many companies appear to be getting more out of their current employees rather than adding new staff. The average work week increased by one-tenth of an hour to 34.2 hours, the department said. That's up from about 33 hours in the depths of the recession.
Average hourly pay also rose 4 cents to $22.59, up 1.8 percent from a year earlier. That, along with the increase in hours worked, could provide some boost to spending.
The number of temporary jobs fell by 5,600, the first drop after nine months of gains.
Manufacturers added 36,000 jobs in July, slightly above its monthly average this year. Those gains were aided by General Motor's decision to keep its plants running last month. Usually it closes them and temporarily lays off employees to retool for the new model year.
Construction firms cut jobs for the third straight month, losing 11,000, while financial firms shed 17,000 workers.
But retailers added 6,700 jobs. And the leisure and hospitality industry hired 6,000 additional staffers.
AP Business Writer Stephen Bernard contributed to this report.
Copyright 2010 The Associated Press.
THIS IS A BREAKING NEWS UPDATE. Read earlier story below.
(AP) -- Economists say the country needs more jobs to quicken the recovery, but the July numbers due this morning are unlikely to show it.
It's believed that 65,000 jobs were lost last month even though the private sector is thought to have added 90,000. The expected drop is explained by the end of more Census Bureau positions, which were temporary. But even without those losses, analysts say a 90,000 job increase in private sector work is not nearly enough to reduce the unemployment rate.
The jobless rate was 9.5 percent in June, but is expected to edge up to 9.6 percent for July.
Without more jobs, Americans are likely to remain cautious about their spending, restraining the economic rebound. But without more spending, companies will likely be slow to hire.