August 7, 2009

Unemployment Slowed in July. Is the Worst Behind Us?

The Department of Labor reported this morning that the number of layoffs slowed to a net total of 247,000 jobs lost in July — the fewest layoffs in a year and significantly less than the 320,000 that analysts were predicting.

The unemployment rate also declined for the first time in 15 months by one-tenth of a point, from 9.5 percent in June to 9.4 percent in July.

At an upbeat press conference in the Rose Garden, President Obama declared that the “worst may be behind us” and that “today we’re pointed in the right direction.”

Despite his optimism, the president was careful to temper his remarks: “We have a lot further to go. As far as I’m concerned, we will not have a true recovery until we stop losing jobs.” In fact, the White House has said that President Obama still believes that unemployment will hit 10 percent this year.

While some economists are joining the President in predicting that we have seen the worst of the recessions, others are cautioning that we are still in shaky territory. After all, we are still lowing jobs — at a rate of 247,000 per month right now, which is hardly positive economic growth.

Since the recession began in December 2007, 6.7 million net jobs have been lost. Stabilizing the unemployment rate would require the U.S. economy to add a net total of 125,000 new jobs per month. To get the unemployment rate back down to 5% would take a net job creation rate of 200,000+ jobs a month.

The hardest job hit sector in July was retail, while education, healthcare and federal government employment,  all saw some gains.  Hopefully that spells good news for some of you looking for work!

(Go here to read the full report from the Department of Labor.)

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