October 2, 2022

Hiring and Manufacturing Remain in a Summer Slump

Layoffs are rising. Manufacturing activity in the Northeast expanded only slightly in July after contracting in June. Economic growth is projected to pick up this fall, but not enough to give businesses sufficient confidence to hire and speed the recovery.

Economists are forecasting a third straight month of feeble hiring in July, based on the latest round of data. Expectations are the economy added in the range of 50,000 to 100,000 net new jobs this month.

That is not enough to keep up with population growth and far below what is needed to lower the unemployment rate, which was 9.2 percent last month.

“We’re going to see improvement, but right now nothing’s improved yet,” said Joshua Dennerlein, an economist at Bank of America Merrill Lynch.

Applications for unemployment benefits rose last week to a seasonally adjusted 418,000, the Labor Department said. They have now topped 400,000 for 15 straight weeks. Applications had fallen in February to 375,000, a level that signals healthy job growth.

The Federal Reserve Bank of Philadelphia said its manufacturing index rose to 3.2 in July, a sign that the sector was growing again. It contracted in June for the first time in nine months. The index dropped to negative 7.7, the lowest level in two years. Any figure below zero indicates contraction.

The index topped 40 in March. The lower reading illustrates what analysts said was the impact of a parts shortage caused by the Japanese earthquake, which has affected many automakers and electronics producers. Still, manufacturers expressed some hope in the latest survey, saying they expect orders and shipments to pick up significantly six months from now.

The Conference Board projected modest growth for the broader economy in the coming months based on its latest reading of leading economic indicators. The index rose in June for the second straight month. It declined in April, the first time that had happened in nearly a year.

The private research group offered a caveat: Federal lawmakers must agree to raise the government’s borrowing limit and avoid a default on the debt.

The federal government has reached its borrowing limit of $14.3 trillion, and the Obama administration says the government will not be able to pay all its bills if the cap is not raised by Aug. 2.

Article source: http://feeds.nytimes.com/click.phdo?i=cb328e00385bf0639d88377351f49b3b

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