The latest jobs report detailing the U.S. unemployment rate for July reflects the ongoing battle between the bad news and also the good news. Unemployment has been at 9.5 percent for a while. Job loss has been more than what was expected. In July alone, 71,000 jobs were created while 131,000 were lost. As the lowest edition of the year, manufacturing added 36,000 new jobs. Average hourly earnings increased, average hours worked rose and productivity increased. Hiring has stopped because productivity is doing so well.
Waiting for unemployment rate to get out of limbo
Companies within the U.S. added workers in July for a seventh straight month. The number of jobs being gained every month is 100,000 despite the fact that that is not enough to balance the amount being lost each month which is more than that, reports the Wall Street Journal. The number of jobs accessible in June went down also. 125,000 more than reported before, jobs went down 221,000 that month. Only 31,000 jobs were added to the private sector in June. 131,000 jobs were lost in July rather than the 60,000 expected to be lost by Dow Jones Newswires.
Everyone employed is glad
July’s jobs report did contain a few bright spots. Daily Finance reports the average workweek increased by 0.1 hours to 34.2 hours. Average hourly earnings increased 4 cents to $ 22.59 per hour. The last 12 months has a 3 percent increase in productivity when in the first quarter of 2010, the increase was 4 percent. Higher U.S. productivity is boosting corporate earnings. Companies are sitting on huge piles of cash. High productivity and more efficient business models are good for stock prices, but that means many companies do not feel they have to hire more workers.
Unemployment problems for the Federal Reserve
The unemployment rate will be changed depending on what the jobs report influences the Federal Reserve to do. Fed chairman Ben Bernanke told Bloomberg that a possible solution could be reducing the rate of 0.25 on reserve deposits. The Fed has about $ 2.3 trillion in assets, although one more option could be to expand those assets to hold down borrowing costs.
Unemployment concerns many Americans
Meanwhile, much like the good news/bad news within the jobs report, the conflicting opinions of the public cancel each other out. More than seven in 10 Americans say the U.S. economy is nevertheless mired in recession, according to a Bloomberg National Poll. Seven out of ten people also answered that the government should be working on unemployment before anything else. More than half don’t like the extra spending with the stimulus program.
Additional reading
Wall Street Journal
online.wsj.com/article/SB10001424052748703309704575412990024153682.html?mod=googlenews_wsj
Daily Finance
dailyfinance.com/story/careers/july-jobs-report-unemployment-remains-high/19583596/
Bloomberg
bloomberg.com/news/2010-08-06/company-payrolls-rose-by-71-000-in-july-u-s-jobless-rate-9-5-.html
