117K Jobs Added In July Ease Fears Of Recession
Employers added 117,000 jobs last month, the Labor Department said Friday. The figure was the best in three months. And the job totals for May and June were revised up.
Retailers, factories and health care firms were among the many industries that added workers. Even another loss of government jobs wasn't too worrisome, after considering that most of them stemmed from the temporary shutdown in Minnesota, which has since ended.
The brighter outlook for hiring sparked a brief stock market rally one day after the Dow Jones industrial average lost 500 points. But after gaining 171 points after the market opened, the Dow erased those gains and fluctuated throughout the day. Investors seemed focused on Europe's response to its debt crisis.
The jobs report surpassed most economists' expectations. But other recent data show the U.S. economy remains weak and isn't generating enough jobs to lower the unemployment rate.
For the first half of the year, the economy grew at an annual rate of just 0.8 percent. In June, consumers cut back on spending for the first time in 20 months, burdened by higher gas prices and stagnant wages. Manufacturers are barely growing.
At least 250,000 net new jobs a month are needed to rapidly reduce unemployment. The rate has topped 9 percent in every month except two since the recession officially ended in June 2009.
"This pauses the conversation on the U.S. slipping back into recession; it does not end the conversation," said Tom Porcelli, chief U.S. economist at RBC Capital Markets.
President Barack Obama on Friday pointed to the modest job gains to press Congress to extend a Social Security tax cut enacted this year that put an extra $1,000 to $2,000 in most workers' pockets. He also called for a renewal of emergency unemployment benefits, which provide up to 99 weeks of support.
The tax cuts and extra benefits are scheduled to expire at the end of this year. Economists have cautioned that the end of the two programs could weaken growth in 2012.
In July, businesses added 154,000 jobs across many industries. Governments cut 37,000 jobs last month, the ninth straight drop. Still, 23,000 of those losses were almost entirely because of the shutdown of Minnesota's state government.
The government said the economy added 53,000 jobs in May, up from an earlier estimate of 25,000, and 46,000 in June, up from 18,000. June's total was still the weakest in nine months.
"These numbers are not great," said Ian Shepherdson, an economist at High Frequency Economics, in a note to clients. "But they are a long way from recession territory."
Hiring in July was broad-based. Manufacturers added 24,000 jobs in July, as auto companies laid off fewer workers in July than usual. Retailers hired a net total of 26,000 employees. Employment in health care grew 31,000. Hotels, restaurants, and other leisure and hospitality companies added 17,000.
The unemployment rate fell from 9.2 percent in June partly because some unemployed workers stopped looking for work. That means they're no longer counted as unemployed.
As a result, the number of unemployed people fell to 13.9 million, down from 14.1 million. Still, that's nearly double the total before the recession.
The percentage of people either working or searching for jobs fell to 63.9 percent, the lowest in 27 years.
Workers did see some pay gains last month. Average hourly wages rose 10 cents to $23.13.
The number of people working part time who would prefer full-time work declined.
When you add them to the number of people who are either unemployed or have given up looking for work, 25.1 million people were "underemployed" in July. That's 16.1 percent of the work force, down from 16.2 percent in June.
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By AP,
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