Unemployment Rate Falls For “All the Wrong Reasons” - More than 650,000 people gave up on the job search last month
The U.S. job market remains anemic. Employers cut 1250,00 jobs in June, more than expected. The job cuts came as the government let go 225,000 temporary census workers, as expected. Meanwhile, the private sector gained 83,000 jobs, the sixth-consecutive monthly increase but still less than most economists forecast.
Yet the unemployment rate fell to 9.5% in June from 9.7%, the lowest level in nearly a year. Unfortunately, it dropped “for all the wrong reasons” says Nigel Gault, U.S. chief economist at IHS Global Insight. The unemployment rate is lower simply because the labor market shrank, as more than 650,000 people gave up on the job search last month.
More telling is the “real unemployment” rate, or U6. Including people working part-time and those who’ve given up looking, the real unemployment rate is 16.5%.
Gault says the lousy job market reflects an economy still weak and companies making due with less. At the current pace, the road to recovery will be long and bumpy.
The Daily Kos summarizes the grim statistics:
- About 14.6 million Americans remain unemployed.
- 45.5% the unemployed, or 6.8 million Americas, have been out of work for 27 weeks or more. The ranks of these long-term unemployed remains at a post-Depression record.
- There are now 7.9 million more Americans out of work than when the recession began in December 2007. (Roughly 15 million more are underemployed or have dropped out of the labor force — and thus the statistical calculations).
Read the whole story at Yahoo Finance
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