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KQED Radio...
U.S. Jobs Up 117,000;
July Unemployment 9.1 Percent
by NPR Staff and Wires
August 5, 2011
Hiring picked up slightly in the U.S. in July and the unemployment rate
dipped to 9.1 percent, an optimistic sign after the worst day on Wall
Street in nearly three years.
The Labor Department said Friday that employers added 117,000 jobs last
month. That’s an improvement from the past two months.
The mild gain may ease investors’ concerns after the Dow Jones
industrial average plummeted more than 500 points over concerns that
the U.S. may be entering another recession.
Still, the economy needs twice as many net jobs per month to rapidly
reduce unemployment. The rate has topped 9 percent in every month
except two since the recession officially ended in June 2009.
The unemployment rate fell partly because some unemployed workers
stopped looking for work. That means they are no longer counted as
unemployed.
Economists had predicted that U.S. employers added 90,000 jobs last
month and that the unemployment rate was unchanged at 9.2 percent,
according to a survey by FactSet.
At least 125,000 jobs a month are needed to keep up with population
growth. Twice as many are generally associated with significant
declines in the unemployment rate, which has risen for three straight
months.
Economists at Bank of America Merrill Lynch estimate there is a 35
percent chance of another recession within the next year.
Such fears and heightened concerns about Europe’s debt crisis sent
stock markets plummeting Thursday. The Dow Jones industrial average
fell nearly 513 points, its biggest decline since Oct. 22, 2008.
Since July 21, the Dow has closed lower in nine of the last 10 trading
days. All three major stock market indexes have fallen 10 percent or
more from their previous highs.
Markets in Europe also continued to slide Friday following the heavy
losses on Wall Street the day before.
Investors fear that Europe is incapable of stopping the eurozone’s
sovereign debt crisis, that Italy and Spain may eventually default and
that the economic recovery in the U.S. is stalled.
The U.S. economy grew at a meager 0.8 percent annual rate in the first
six months of this year, the slowest pace since the recession
officially ended. Manufacturers are barely growing. Service companies
are growing at the weakest pace in a year and a half. Consumers cut
spending in June for the first time in 20 months, and they saved more.
High gas prices and scant wage increases have squeezed U.S. consumers
this year. And consumer spending accounts for 70 percent of economic
activity.
Businesses have responded by cutting hiring after a strong start in
which they added an average of 215,000 jobs a month from February
through April.
Michael Feroli, an economist at JPMorgan Chase, on Wednesday said he
thinks the economy will grow at a meager 1.5 percent annual rate in the
July-September period, down from an earlier estimate of 2.5 percent.
The economy needs to expand at an annual rate of at least 2.5 percent
to keep the unemployment rate from rising. And growth would have to
accelerate to 5 percent for a whole year to bring down the rate by 1
percentage point.
There was some modest good news Thursday. Weekly applications for
unemployment benefits dipped to 400,000, the fewest in four months. The
four-week average, a more reliable measure, fell for the fifth straight
week, also to the lowest level since early April.
But economists said the drop came too late for Friday’s jobs report.
Instead, it could signal some modest job gains in August.
Source: NPR
Read it at KQED Public Radio San Francisco
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