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U.S. down 131K jobs in July; unemployment rate still 9.5%

The Bureau of Labor Statistics Employment Situation Summary was published today.

Total nonfarm payroll employment declined by 131,000 in July, and the unemployment rate was unchanged at 9.5 percent, the U.S. Bureau of Labor Statistics reported today. Federal government employment fell, as 143,000 temporary workers hired for the decennial census completed their work. Private-sector payroll employment edged up by 71,000.

The LATimes online notes that “revisions of the previous month revealed a much bigger job loss than originally reported: The nation lost 221,000 jobs in June, not 125,000.

I noted a few days ago, in a blog entry entitled “Is business killing the economic recovery?” that, according to reports, “American” companies are spending huge sums on new equipment (generally imported) without adding more workers. This behaviors differs sharply from the behavior of companies coming out of deep recessions in the past, in which they undertook BOTH capital spending and HIRING fairly quickly.

That is why WE CAME OUT OF earlier recessions!

The LATimes online notes:

Not this time. Even as the country emerged from the worst recession in more than half a century, corporations have sharply stepped up their capital spending, but they have invested relatively little in job creation.

“A significant portion [of corporate spending] is going into equipment and software that are bolstering productivity as opposed to gearing up for expansion and job growth in the near term,” said economist Lynn Reaser, president of the National Assn. for Business Economics, after analyzing government data on business spending.

Although employment in manufacturing went up by 36,000 in July, continuing its yearlong growth, much of it was because automakers had fewer seasonal layoffs than usual. The temporary help sector, which is usually viewed as a precursor to broader hiring, lost jobs in July for the first time since September 2009. Capital spending has gone up in every quarter since last summer, jumping 21% at an annualized rate in this year’s second quarter, according to government data.

The number of workers “marginally attached to the labor force,” who are not counted as unemployed, has increased, according to the government report.

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged over the month at 8.5 million but has declined by 623,000 since April. These individuals were working part time because their hours had been cut back or because they were unable to find a full-time job.

About 2.6 million persons were marginally attached to the labor force in July, an increase of 340,000 from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

Among the marginally attached, there were 1.2 million discouraged workers in July, up by 389,000 from a year earlier. (The data are not seasonally adjusted.) Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.4 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities.

The report had the following to say about particular industries:

Manufacturing employment increased by 36,000 over the month. Motor vehicles and parts had fewer seasonal layoffs than normal for July, contributing to a seasonally adjusted employment increase of 21,000. The industry had added 32,000 jobs in the first 6 months of the year. In July, employment in fabricated metals rose by 9,000. Manufacturing employment has expanded by 183,000 since December 2009.

Health care added 27,000 jobs in July. Over the past 12 months, health care employment has risen by 231,000.

In July, employment in transportation and warehousing edged up by 12,000. Since a recent low in February, transportation and warehousing has added 56,000 jobs.

Mining employment rose by 7,000 in July, with the gain concentrated in support activities for mining. Mining has added 63,000 jobs since October 2009.

Employment in professional and business services was little changed (-13,000) in July. The number of jobs in temporary help services showed little movement (-6,000) over the month.

Employment in financial activities continued to trend down in July, with a decline of 17,000. So far this year, monthly job losses in the industry have averaged 12,000, compared with an average monthly job loss of 29,000 for all of 2009.

Construction employment changed little (-11,000) in July; 10,000 construction workers were off payrolls due to strike activity.

Employment in other private-sector industries, including wholesale trade, retail trade, information, and leisure and hospitality showed little change in July.

Government employment fell by 202,000 in July, largely reflecting the loss of 143,000 temporary workers hired for Census 2010. Employment in both state and local governments edged down over the month.

Bill Cheney, who is the chief economist at John Hancock Financial in Boston, is still hopeful that hiring will pick up as sales increase and workers are “pushed to the hilt.” If not, he said, companies’ reluctance to hire could end up hurting them and undermining the recovery.

“Profits are great, but all that could change if the job engine continues to sputter,” Cheney said . “Business capital spending helps, but consumer spending matters more.” And without jobs, he said, people will pull back.

Economists say the U.S. needs to add a net 125,000 jobs each month just to keep pace with the growing population and new entrants in the job market. Through July, the economy has added a total of 654,000 jobs this year — making barely a dent in the nearly 8.4 million jobs lost in 2008 and 2009.

For now it looks like many companies seem to be content with making high profits, to the detriment of their workers, the unemployed, and the American economy, as if there were no tomorrow. Myopic to the end….

-Bill at

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