June Jobs Report Shows Only Modest Growth
The US economy added 80,000 jobs in June after a revised increase of 77,000 jobs in May, according to Labor Department figures. Unemployment stayed the same, at 8.2 percent.
The figures are disappointing, with economists having predicted a 100,000 gain, and not enough to make a real change in the backlog of nearly 13 million unemployed individuals.
Similarly “tepid” job growth — around 130,000 a month, which would be “just enough” to keep pace with growth in the working-age population — is expected for the rest of the years, say economists in the New York Times.
The first quarter of the year saw an average of 226,000 jobs added a month, while the average from April to June has been just 75,000. Job losses occurred in retailing, transportation and government sectors.
Job growth slowed suddenly in March after picking up in the winter and some economists have wondered if the “unseasonably warm winter, rather than a fundamentally healthier economy, had been the real source of the temporary employment surge,” says the New York Times.
The jobless rate worsened for African Americans rose to 14.4 percent in June from 13.6 percent in May. It changed little whites at 7.4 percent and for Hispanics at 11 percent.
The underemployment rate — referring to part-time workers who would prefer a full-time position and those wanting work but have given up looking — rose to 14.9 percent from 14.8 percent.
In a spot of good news, average hours worked increased slightly, to 34.5 hours in June from 34.4 in May. Average hourly wages rose six cents to $23.50, meaning that hourly pay has increased 2 percent in the last 12 months.
Corporate profits fell in the first quarter of 2012, the first time since 2008, the Commerce Department reported last week. These losses are not so much from the developing world but due to the ongoing sovereign debt crisis in Europe. Said Andrew Tilton, a senior United States economist at Goldman Sachs, “When you factor in the effect on U.S. trade, financial markets and credit availability, the Europe crisis is probably taking a percentage point off of U.S. growth.”
The economy is sure to play a significant role in President Barack Obama’s bid for reelection. As Bloomberg notes, since World War II, Ronald Reagan has been the only president who stayed in office when the unemployment rate was over 6 percent. The rate was 7.2 percent in the month of his re-election in 1984, after falling almost three percentage points in the previous 18 months.
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