February 26, 2021

U.S. Posts Stronger Job Growth in July

The July gain, of 117,000, is hardly robust enough to produce a substantial change in the employment picture. Still, it is better than the previous months, whose job gains were revised slightly upward to 46,000 in June and 53,000 in May.

After the early morning announcement, stocks see-sawed throughout the day, with investors vacillating between encouragement that the jobs number was not worse and disappointment that the world’s economies are not on firmer footing.

Europe, in particular, is struggling to control a debt crisis that began in its smaller countries and now threatens the much bigger economies of Italy and Spain. A flurry of phone calls among European leaders led to announcements in Italy and elsewhere that reforms would be speeded up. Those who have been waiting for the United States economy to kick into high gear took little comfort in Friday’s jobs report from the Labor Department. Companies added 154,000 jobs in July, but state and local governments continued to backslide, shedding 39,000 jobs. The unemployment rate slipped a notch to 9.1 percent, from 9.2 percent in June, but that was mainly because some people had simply given up looking for work.

The news tempered, but did not silence, talk of a double-dip recession. “It gives us some temporary relief,” said Nigel Gault, chief United States economist at IHS Global Insight. “I suspect, though, that relief will probably not last too long as people refocus on what they think will happen in the future.”

Indeed, economists are now worried about the reduction in government spending outlined in the Congressional deal earlier this week to raise the country’s debt ceiling. Deep divisions remain between the two political parties on how to cut spending further at a time when many analysts worry that the economy can ill afford it.Speaking at the Washington Navy Yard as he announced new programs for returning veterans of the Afghanistan and Iraq wars, President Obama called for Congress to extend the payroll tax credit and emergency unemployment insurance, measures that are scheduled to expire at the end of this year.

“There’s no contradiction between us taking some steps to put people to work right now and getting our long-term fiscal house in order,” Mr. Obama said. “In fact, the more we grow, the easier it will be to reduce our deficits.”

Other signs that the recovery has slowed to a crawl are mounting. The Commerce Department reported earlier this week that consumer spending, which accounts for up to 70 percent of economic activity, actually declined in June for the first time in nearly two years. A closely watched survey of manufacturers showed that employment in July grew at a slower rate than in June and that new orders of factory goods actually fell. Companies like Merck, Cisco and Boston Scientific have all announced layoffs in recent weeks. Housing prices are still extremely weak.

Jan Kokes, president of Kokes Family Home Builders, which creates residential communities for 55-and-over buyers in Ocean County, N.J., said that his staff had shrunk from a peak of 220 in 2007 to 87 now. With average home sales down from 200 a year to just 30, he said, he has no plans to hire. “There really aren’t any jobs in the construction industry right now,” he said.

The typical precursors to increased hiring remained sluggish. Average weekly hours worked, which tend to rise as a sign that employers are maximizing their current staff, were flat in the latest month, and average weekly earnings nudged up only slightly.

In temporary work, which often ticks up as employers prepare to expand, there were no job addition in July.

Tig Gilliam, chief executive of the Adecco Group North America, said that while information technology, engineering and some other industry sectors were seeking more temporary workers, some others, like government and the mortgage industry, were not. “It’s the story of growers and shrinkers,” Mr. Gilliam said.

Article source: http://www.nytimes.com/2011/08/06/business/economy/us-posts-solid-job-gains-amid-fears.html?partner=rss&emc=rss

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