All week, expectations for today's monthly job report had been steadily lowered as bits of bad news trickled out. It was almost as if observers thought they could pre-empt disappointing numbers by being more downbeat ahead of time. If so, it didn't work. The Department of Labor's numbers were even worse than expected, with only 83,000 new private jobs being created in June. The consensus of 82 experts surveyed by Bloomberg in advance of the government's report had been for a gain of 110,000 private jobs. It was the sixth month of job growth, but the overall total has been anemic.
"We need unprecedented rates of growth to get out of this hole in a reasonable amount of time," Jesse Rothstein, chief economist at the Department of Labor, said in an interview ahead of the release. "It's hard to overstate how deep the hole is."
The non-farm payroll fell by 125,000 jobs. The Census laid off 225,000 of its temporary employees. But the Census numbers had long been anticipated and discounted. It was private-sector hiring upon which hopes had been pinned. This month and in August, another 300,000 temporary Census workers will be laid off.
Some 14.6 million Americans remain unemployed. There are now 7.9 million more Americans out of work than were unemployed when the recession began in December 2007. Perhaps another 15 million are underemployed or have dropped out of the statistical calculations out of despair.
The iconic (updated) chart from Calculated Risk. Click here for a larger version.
The U3 unemployment rate fell to 9.5 percent, which would seem like a good thing except that it was a consequence of the labor force shrinking by 652,000 jobs. An alternative measure, U6, which includes part-time workers and people who have given up looking for jobs, fell to 16.5 percent.
The civilian labor force participation rate fell to 64.7 percent, and the employment-population rate dropped to 58.5 percent.
The number of long-term unemployed – those out of work for 27 weeks or more – remained at 6.8 million, 45.5 percent of all those unemployed. This continues to be a post-Depression record.
While Census hiring provided temporary relief for hundreds of thousands of unemployed Americans, it was long known that May would be the peak for those jobs and that, from here on out, improvement in the job situation would strongly depend on private-sector hiring. Clearly, it has not delivered. It takes 100,000 to 125,000 new jobs each month just to match population growth. Now, the only glimmer of hope is that Census hiring may have suppressed private hiring and that there will consequently be an uptick in July and August.
With the effect of stimulus now fading fast, the best that can be expected for the next few months and perhaps well into 2011 is a lukewarm economy. All week, other reports showed a continuing weakening: estimates of first quarter's gross domestic product were revised downward again, manufacturing continued its 11th month of expansion but now at a reduced pace with a slackening of orders and exports, consumer confidence plunged, pending home sales plummeted, and motor vehicle sales fell short of hoped-for results. Discussion of the potential for a double-dip recession spread.
All this played against a backdrop of Republican obstructionism and a Nebraska Democrat's stubborn opposition to extending unemployment benefits. While the economy remains uncertain, the one thing that we can be sure of is that the GOP and the right-wing media chorus will use these numbers as part of their midterm campaign strategy of persuading Americans that the economic situation is all the fault of the administration and congressional Democrats.
That's far from the truth – the right wing has sought to undermine the Democrats' efforts from the beginning, hoping, in the words of Rush Limbaugh, that they failed. But the Democratic leadership's ignoring of progressive pleas for starting a direct-hiring program akin to the New Deal's Civilian Conservation Corps and Works Progress Administration has now been shown for the gross error it was. There's no time to repair the damage before November.
The jobs report also noted:
• Manufacturing employment rose by 9000 jobs
• Construction employment declined by 22,000 jobs
• Temporary help services added 21,000 jobs
• The average workweek for production and non-supervisory workers dropped to 34.1 hours.
• Average hourly earnings decreased by 2 cents in June.
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New Deal democrat has a diary on this subject here. SilverOz has one here.