Improved job numbers in July

IMPROVED JOB NUMBERS IN JULY…. A whole lot of eyes were focused on the July employment numbers, released this morning, and most forecasts expected about 325,000 job losses and an unemployment rate that would increase to 9.6%. Fortunately, the new data was slightly better than the expectations, and better still than the numbers we saw in June.

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Employers throttled back on layoffs in July, cutting just 247,000 jobs, the fewest in a year, and the unemployment rate dipped to 9.4 percent. It was a better than expected showing that offered a strong signal that the recession is finally ending.

The new snapshot, released by the Labor Department on Friday, also offered other encouraging news: workers’ hours nudged up after sinking to a record low in June, and paychecks grew after having fallen or flat lined in some cases.

To be sure, the report still indicates that the jobs market is on shaky ground. But the new figures were better than many analysts were expecting and offered welcomed improvements to a part of the economy that has been clobbered by the recession.

It was the first time the unemployment rate went down, instead of up, since April 2008.

If we include those who are working part-time but want full-time employment, or those who’ve simply given up — the U6 measure — the overall rate in 16.3%. That’s down from 16.5% in June, which was the highest it’s been since the government began keeping track in 1994.

Overall, there have now been 6.7 million job losses since the start of the recession in December 2007.

The NYT report on the July numbers added, “Even if the economy begins growing again this summer — as many economists expect it will — laid-off workers are likely to be among the last to benefit. Businesses that slashed their work force and inventories over the last year to cope with the economic deterioration are likely to hire temporary workers or pay overtime wages before they begin fielding applications for new full-time workers.”

As a result, layoffs may ease, even if employers hold off on new hires. This is likely to continue into 2010.

That said, there hasn’t been encouraging news on the job front in quite a while, and given the severity of the economic crisis, today’s report offers at least some relief. The job numbers beat expectations, the overall unemployment rate declined, earnings went up, and the manufacturing sector improved.

It’s never good news when 247,000 Americans lose their jobs in a month. But under the circumstances, the new numbers are, at a minimum, a step in the right direction.

* updated with home-made chart