Adolfo Laurenti, Deputy Chief Economist
July 2, 2010 – 8:20 a.m. CT
A Disappointing Job Market Report for June
The labor market suffered a setback in June when 125,000 jobs were lost nationwide. For the most part, the decline reflects a decrease of 225,000 temporary employees working on the U.S. Census. The silver lining – job creation in the private sector showed some improvement as 83,000 new employees were added to payrolls. However, even in this case, data fell short of rosier expectations.
The unemployment rate dropped from 9.7% to 9.5% in June. Unfortunately, this is only apparently good news. In fact, the decline was mostly the result of people exiting the workforce at a faster clip. The household survey shows a decrease, both in the number of the employed and of the unemployed.
Furthermore, small declines were recorded in both hours worked and earnings paid, showing further evidence of the loss of momentum in activity that has been suggested by several recent indicators.
Overall, the picture revealed by the latest data is not pretty. This recovery – which was never robust in the first place – enters the summer with a weak labor market. Although we expect that private payrolls will continue to grow, the current pace of improvement is too slow to provide any relief to the people struggling to find jobs. The light at the end of the tunnel is not as close as we had hoped.
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