It Continues To Look Like A Jobless Recovery

By John S. McClenahen Forecasts of a U.S. unemployment rate as low as 5.5% by year's end and a modest gain in the number manufacturing jobs appear to be wishful thinking in the context of June's employment data. The nonfarm sector of the U.S. economy shed 30,000 jobs in June and the overall unemployment rate rose to 6.4%, the U.S. Labor Department reported on July 3. With many economists expecting GDP to increase at an annual rate of about 3.5% during the next six months, the current jobless recovery could continue for some time. "The labor market remained sluggish in June," says Kathleen P. Utgoff, commissioner of the Bureau of Labor Statistics, the Labor Department agency that collects and publishes employment data. Utgoff may be understating the situation, at least for manufacturing. In June, U.S. manufacturing lost another 56,000 jobs. What's more, the manufacturing job losses were widespread, with primary metals, fabricated metals, textiles and plastics most seriously affected. Most sectors of manufacturing have been cutting the size of their workforces for more than two years, and total factory employment has fallen by 2.6 million people since the summer of 2000, Labor Department data show. For the week ending June 28, initial claims for unemployment insurance rose to 430,000, an increase of 21,000 from the revised figure of 409,000 for the previous week, the Labor Department also reported on July 3. The initial-claims figure for the final full week of June was 20,000 above the level economists generally expected. The four-week moving average of claims, usually regarded as a better reflection of underlying labor market trends, posted a small decline to 425,000 during the last week of June, although that number was still well above the 350,000 mark that could signal the beginning of some significant job creation.

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