A PAINFUL REVERSAL FOR U.S. JOB MARKET…. All available evidence suggested the monthly job totals in June were going to be disappointing. They were.
A positive trend has been evident for the last year and a half — as stimulus efforts bolstered economic growth, the economy added jobs. This was especially evident since the new year, as the economy added jobs in each of the past five months, with each month better than the last.
In June, however, the trend reversed, and the economy shed 125,000 jobs, the worst month since October.
The path to economic recovery remained a twisted one on Friday as the government reported a net loss of 125,000 jobs in the American economy last month, driven by the evaporation of temporary Census jobs, the Labor Department reported.
The unemployment rate, meanwhile, fell to 9.5 percent from 9.7 percent in May.
The job loss was in line with expectations. And with the anticipated loss of hundreds of thousands of Census jobs — jobs that had accounted for almost all the growth in the labor market in May — economists were focused in particular on the change in private-sector hiring. There, the news was better but muted, with 83,000 new jobs created.
If there’s even the slightest bit of less-bad news in today’s BLS report, it’s that last point about private-sector hiring. While those 83,000 new jobs are hardly sufficient, the total exceeded expectations and represented an improvement over May.
Nevertheless, one can only hope that this report makes it abundantly clear to policymakers in Washington that more investment in job creation is necessary. Cutting spending and focusing on deficit reduction, as Republicans demand, may prove disastrous.
For what it’s worth, the job numbers for April and May were revised upwards, but only a little. While previous estimates showed the economy adding 290,000 jobs in April, the updated total was a gain of 313,000. May’s numbers were revised from 431,000 to 433,000.
Once again, here’s the homemade chart I run on the first Friday of every month, showing monthly job losses since the start of the Great Recession. The image makes a distinction — red columns point to monthly job totals under the Bush administration, while blue columns point to job totals under the Obama administration.