WASHINGTON – “Non-farm payroll employment continued to trend down in July,” shrinking by 51,000 jobs nationwide, matching a revised June decline that was smaller than previously thought, “and the unemployment rate rose from 5.5 to 5.7 percent,” Keith Hall, commissioner of the U.S. Department of Labor’s Bureau of Labor Statistics, told Congress today.
“Thus far in 2008, payroll employment has fallen by 463,000, or an average of 66,000 per month,” Hall said. His address before the Joint Economic Committee accompanied the release of the bureau’s monthly employment situation report.
Analysts had expected payrolls to fall more sharply – projecting a 75,000-job decline would follow the originally estimated June loss of 62,000 – based on the median estimate from a Bloomberg News survey of 80 analysts. Their forecast also called for a July jobless rate of 5.6 percent.
The 5.7-percent July reading posted today by the BLS was the nation’s highest unemployment rate since March 2004.
Health care and mining continued to add jobs last month, but those gains were outpaced by continued declines in construction, manufacturing and several service-providing industries, the BLS said.
Construction employment declined by 22,000 jobs in July, to 557,000 jobs fewer than at its peak in September 2007. “Nearly three-fourths of the decline (-402,00 jobs) has occurred since October 2007,” Hall said.
“Manufacturing employment fell by 35,000 in July,” he said. “Job losses have averaged 39,000 per month thus far in 2008, compared with an average loss of 22,000 per month during 2007.
“Employment services lost 34,000 jobs over the month, with nearly all of the decline in temporary help,” Hall added. Employment in the temporary-help industry is down 268,000 since December 2006, “with more than two-thirds of the loss (-185,000) occurring since January,” he said.
But health care payrolls nationwide added 33,000 jobs in July, while mining added 10,000 in what Hall said was the industry’s “third consecutive gain of this magnitude.”
Average hourly earnings for private-sector production and non-supervisory workers rose to $18.06 – an increase of 6 cents per hour, or 0.3 percent, compared with June and 3.4 percent from July 2007 – matching analyst expectations in the Bloomberg survey. But the average work week shrank 0.4 hours compared with June to 33.6 hours, boosting average weekly earnings by 22 cents to a July level of $606.82.
The number of unemployed job-seekers nationwide increased to 8.8 million, Hall said, adding: “Over the last 3 months, there has been a notable increase in unemployment of youth” ages 16 to 24.
Hall noted, however that “not all of the increase in unemployment in the last 3 months was among youth; joblessness also rose among those 25 years and older.” Moreover, the BLS commissioner said, “the number of part-time workers who would prefer to work full time continued to rise in July. The number of such workers has increased by 1.4 million over the past 12 months to 5.7 million.”
The influx of young job-seekers also was mentioned by labor-market analyst John A. Challenger, CEO of Chicago-based outplacement consultancy Challenger, Gray & Christmas, in a statement that followed the BLS report.
“We may not know for several more months whether we currently are in a recession,” Challenger said. “It probably feels like a recession for many Americans, particularly those looking for a job. [And] today’s government report on jobs will undoubtedly confirm these recessionary feelings, in light of the seventh consecutive month of declining payrolls and the rise in the unemployment rate to 5.7 percent.
“However, it is important to look at today’s report with some perspective. The unemployment rate is rising primarily due to the unavailability of summer jobs for teens, 20.3 percent of whom are now unemployed.
“The inability of teens to find seasonal work is a bellwether of the economy’s strength, but it is largely a reflection of what is occurring in low-skilled, low-paying occupations.
“Meanwhile, the unemployment rate among those 25 and older is 4.4 percent, hardly a level indicative of widespread joblessness,” Challenger said.
“Of course,” he added, “for the individual who is out of work, the unemployment is not 20.3 percent, 5.7 percent or 4.4 percent. It is 100 percent.”
Additional information, including the Employment Situation Summary and the BLS Commissioner’s Statement on the Employment Situation release, is available from the U.S. Department of Labor’s Bureau of Labor Statistics at www.bls.gov.
