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U.S. economy loses 131,000 jobs in July

Current and former military job hopefuls line up

Current and former military job hopefuls line up to see a recruiter at the Civilian Jobs career expo. (Aug. 5, 2010) Credit: Getty Images

The U.S. economy lost 131,000 jobs in July, more than twice as much as some economists had expected, according to federal data released Friday. And once again, modest gains in the all-important private-sector were wiped out by huge layoffs of temporary Census workers.

The private sector increased by a modest 71,000 jobs in July, but that was overwhelmed by a loss of 202,000 government jobs, including 143,000 temporary Census jobs. Those jobs had boosted the April, May and June jobs reports. A panel of economists surveyed by Bloomberg News had predicted an overall drop of 65,000 nonfarm jobs, which includes the private sector and government jobs.

Revisions of previous months showed that the economy was weaker than earlier thought. June's 125,00 loss was revised to a 221,000 decline, also reflecting the end of some temporary Census jobs. The private sector's previously reported 83,000 gain was revised down to 31,000.

"The current pace of employment is too slow to replace the more than 8 million jobs lost in the recession - not in the next year or two, perhaps even not in the next five years," said Bart van Ark, chief economist of The Conference Board, a Manhattan-based business research group in a statement.

The 9.5 percent employment rate in July was unchanged from the month before.

The temporary staffing industry, considered bellwether of the job market's health, lost 5,600 jobs in July, ending nine straight months of gains.

Conference Board senior economist Gad Levanon said he wasn't concerned for now because the sector's decline was small and involves just one month of data. But he cautioned, "One or two more months or that would be an indication of another period of job losses."

Local staffing agencies said that demand for temps and permanent hires has picked up after employers' reluctance to take on more workers eased.

Dana Terzian, a permanent-placement recruiter at Adecco in Melville, said that in the first quarter - January to March - companies "wanted to see how the quarter was going to pan out, if their growth was truly growth before they really committed to bring on additional staff."

Now, companies seem more confident, she said, and Adecco is seeing more demand for jobs that would position companies for a recovery, such as financial analyst, controller, sales and marketing.

At Lloyd Staffing, also in Melville, demand for temporary and permanent workers began picking up again in July, after a "great" first quarter and a slower second, said Carolyn Doyle, vice president of the temporary staffing division.

Companies had a lot of "pent up demand" in the first quarter "that they got out of the way," she said. "They quieted down in the second quarter. Things got busy again in the third quarter."

She said the temporary positions with the strongest demand are in health care and consumer goods. Those jobs include medical billers, medical secretaries, and in consumer goods, customer service and marketing.

The manufacturing sector added the most jobs in July - 36,000. Education and health services was second with 30,000 jobs. The government sector lost the most jobs and included a decline of 38,000 local education jobs.

The job market, which is recovering from the worst economic downturn since the Great Depression, will no doubt be in for some more turbulence. For one thing 196,000 temporary Census workers are still working.

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