Grim jobs report casts shadow on recovery
A job seeker looks at a bulletin at the Texas Workforce Commission's Workforce Solutions of Greater Dallas job resource center in Richardson, Texas. (July 5, 2011) Credit: AP
The U.S. economy added a paltry 18,000 jobs last month, reflecting a combination of weak private-sector growth and stepped-up public-sector layoffs. It's the lowest gain in nine months, according to federal data released Friday, and it raised concerns about the economic recovery.
Unemployment inched up to 9.2 percent from 9.1 percent in May. As reported last month by the state, Long Island's current jobless rate is 6.7 percent.
The nation's private sector added 57,000 jobs last month, but federal, state and local governments cut 39,000 jobs, for an overall gain of 18,000. That low number surprised many experts; 85 economists surveyed by Bloomberg News had forecast growth ranging from 40,000 to 175,000 jobs.
The grim data come as Congress and the White House debate budget cuts and the debt ceiling and amid concerns about European debt and a possible slowdown in the global economy. The low level of hiring takes place against the backdrop of healthy corporate profit margins.
President Barack Obama blamed the disappointing showing in part on the wrangling over raising the debt ceiling. The sooner an agreement is reached, he said, the sooner, "we give our businesses the certainty that they will need in order to make additional investments to grow and hire."
The stock market reacted negatively to Friday's jobs report. The Dow Jones industrial average slid 62.29 points to 12,657.20.
The government category shed 29,000 jobs in May and 24,000 in April. As in the June report, the highest number of cuts occurred in local government, especially in education.
Stony Brook University professor Michael Zweig, director of the school's Center for Study of Working Class Life, said the cuts reflect the end of federal stimulus money. "We often don't understand clearly enough how important the stimulus package was to forestall the job losses that we are seeing," he said.
The pace of government job losses should slow in coming months after the rush by state and local governments to balance their budgets before the new fiscal year began on July 1, said Ed Yardeni, president of Yardeni Research Inc., a Brookville investment-strategy consulting firm. "Within the next few months the pace of those cutbacks should be basically diminished," he said.
Yardeni noted that temporary factors depressed June job numbers, such as the effect of the Japanese earthquake on U.S. businesses, and the run-up in gas prices, which cut consumer spending and depressed hiring.
Longer-term, Yardeni worries about continued weakness in the financial sector as firms cut jobs because of declining profits and concerns about regulations. The financial-activities category lost 15,000 jobs in June, the most of any private-sector category.
The leisure and hospitality sector, which includes hotels and restaurants, added the most jobs with 34,000.
Though job growth is weak, the gains are still a reminder that some companies are hiring, and some workers better their chances getting a job by changing careers.
Steven Maybloom of Huntington started a new job last week at Farmingdale State College, after losing his bank job as a financial adviser in August 2009. He took numerous green-energy certification courses through the state Labor Department and has finished course work for a master's degree in energy management.
He now works in technical support for the "Smart Energy Corridor" on Route 110, a joint Long Island project to promote more efficient use of energy and of alternative sources. "It's really great to be working in an industry I studied and retooled to be in . . . and to be involved in the greening that's going on," he said.
LOOKING FOR WORK
Cristina Lezcano, 23, Port Washington
Last job: Customer service
Out of work: A few weeks
"Right now, I have $19 and no job. So I don't know what I'm going to do . . . I think my availability is making my job search harder because of school and my daughter."
Dorothy Parsons, 50, Hempstead
Last job: Nurse
Out of work: Two months
"Everywhere I go, they say they'll call me back. They call back and say, 'Sorry, we haven't found anything.' I was refused welfare, I was refused unemployment, so I'm broke."
Guy Graf, 41, Hempstead
Last job: Retail management
Out of work: Four years
"It's hard. I send out resume after resume . . . My sister was a paralegal with a college degree, now she's driving a school bus."
Stephen Englert, 58, Levittown
Last job: Marketing for medical company
Out of work: Four months
"It's tight -- in other words, we have hot dogs instead of steak . . . The hardest part is getting your foot in the door to do the interview thing at my age."
Linda Lopez, 22, Brentwood
Last job: Secretary
Out of work: Two years
"I'm a college graduate and bilingual, but I can't find a job."
Robin Silivanch, 43, Sound Beach
Last job: Medical assistant
Out of work: Four years
"My boyfriend had surgery on his neck and can't work. I'm the one that has to work and be the breadwinner . . . I need a job with full benefits so I can carry us both."
Compiled by Lisa Du
