Thursday, July 2, 2009

US job losses worse than expected

The number of jobs lost in the US last month came in at 467,000, which was much more than had been expected.

The jobless rate rose to 9.5% in June, from 9.4% in May, as the US economy continued to struggle.

Since the start of the recession in December 2007, the number of jobless people has risen by 7.2 million, the Department of Labor said.

The unemployment rate was slightly lower than had been expected, but was still the highest since August 1983.

The number of people losing their jobs can be higher than expected at the same time as the jobless rate is lower than expected, because they are measured in different ways.

The former is a measure of how many people are working, while the latter shows the number of people looking for work.

Not everybody who has lost a job will be looking for another one.

'Terrible' market

The non-farm payrolls number would usually be released on a Friday, but has been announced a day early because US markets will be closed on Friday.

The latest set of figures also included revisions to data for the two previous months, with the number of jobs lost in April rising 15,000 to 519,000 and the number lost in May falling 23,000 to 322,000.

Average hourly earnings were unchanged at $18.53 (£11.33).

A total of 14.7 million people were unemployed in June, the figures showed.

The job losses come despite recent signs of optimism from surveys.

"The job market is terrible. It's as bad as we've seen in our lifetime," said Keith Hembre, chief economist at FAF Advisors in Minneapolis.

"The light at the end of tunnel is that we see some stability in domestic demand and some demand overseas."

'Longer process'

In its separate weekly jobs report, the Department of Labor said that the number of newly laid-off workers applying for employment benefits last week fell to 614,000, while the number of people continuing to claim benefits unexpectedly fell to 6.7 million.

The average working week for production and non-supervisory workers fell 0.1 hour to 33.0 hours, which was the lowest since records began in 1964, suggesting that more people are working part-time.

The average working week for manufacturers rose 0.1 hour to 39.5 hours.

"I don't think it means that the story that the economy is bottoming out is wrong, I still think that is the right story," said Nigel Gault, chief US economist at IHS Global Insight.

"But it's evident that it's going to be a much longer process to bottom out in the labour market than it is to bottom out in the auto market or industrial production or GDP."

Story from BBC NEWS:

Published: 2009/07/02 13:36:06 GMT

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