June unemployment report shows hiring slowed to standstill
Unemployment has topped 8 percent for 29 months, the longest streak since the 1930s. It has never been so high so long after a recession ended. At the same point after the previous three recessions, unemployment averaged just 6.8 percent.
And those who do have jobs are earning less. Average hourly wages declined last month. After-tax incomes, adjusted for inflation, have been flat this year.
The average work week declined to 34.3 hours, from 34.4, which means employers demanded less work from their existing staffs. Usually companies demand more hours from their existing staffs when they are preparing to hire more workers.
Temporary employment fell 12,000. Businesses generally hire more temporary workers before taking on permanent ones.
The number of unemployed workers rose almost 175,000 to 14.1 million, pushing up the unemployment rate.
There are signs that economy could improve in the second half of the year. Gas prices have come down since peaking in early May at a national average of nearly $4 per gallon. Prices averaged $3.59 a gallon nationwide on Friday, according to AAA.
And manufacturing activity expanded in June at a faster pace than the previous month, according to the Institute for Supply Management. That suggests the parts shortage caused by the March 11 earthquake in Japan is beginning to abate.
The government said last month that the economy grew only 1.9 percent in the January-March quarter. Analysts are expecting similarly weak growth in April-June quarter.
The economy will grow at a 3.2 percent pace in final six months of the year, according to an Associated Press survey of 38 economists.
Still, growth must be stronger to significantly lower the unemployment rate. The economy would need to grow 5 percent for a whole year to significantly bring down the unemployment rate. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.
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