U.S. private payrolls rose only modestly in
June and overall employment fell for the first time this year as
thousands of temporary census jobs ended, indicating the economic
recovery is failing to pick up steam.
The employment figures from the U.S. Labor
Department on Friday followed a raft of weak reports this week on
consumer spending, housing and factory activity that have heightened
fears the economy could slip back into a recession.
But even though private-sector hiring in
June was well below levels needed to bring down unemployment on a
sustained basis, analysts said the figures were not consistent with an
economy on the brink of another recession.
"We
are still on track for a fairly moderate recovery," said Julia
Coronado, an economist at BNP Paribas in New York. "There have been some
concerns that maybe we are heading for a double-dip. The report eases
those concerns in the sense that we are still creating private sector
jobs."
Private
hiring rose by 83,000 after adding only 33,000 jobs in May. Total
nonfarm employment actually dropped 125,000 -- the largest decline
since October -- as the government laid off 225,000 temporary census
workers.
The unemployment rate fell
to 9.5 percent, the lowest level since July 2009, from 9.7 percent in
May, but only because a flood of jobless workers gave up their
employment search.
President Barack
Obama, whose approval ratings have been battered by the weak economy,
expressed disappointment in the numbers even though he said they showed
the recovery moving forward.
"We're
not headed there fast enough for a lot of Americans," he said at
Andrews Air Force Base in Maryland. "We're not headed there fast enough
for me, either."
Economists polled by Reuters had expected
private employment to grow by 112,000 jobs, although some had scaled
back their projections in recent days. The jobless rate was expected to
edge up to 9.8 percent.
U.S. stock
indexes closed down for a fifth straight day. Prices for government
debt slipped as bond investors, who had driven a rally in recent days,
focused on the report not being as bad as had been feared. The U.S.
dollar fell against the euro.
EUROPEAN
DEBT CRISIS BLAMED
Also on
Friday, the Commerce Department said that factory orders in May suffered
their biggest tumble since March of last year.
Analysts blamed the moderation in the
recovery from the longest and deepest recession since the 1930s on the
sovereign debt crisis in Europe, which is expected to stunt growth in
the region as governments tighten belts to cut budget deficits.
"The European debt crisis is having a
negative impact on consumer and business confidence," said Chris Rupkey,
chief economist at Bank of Tokyo-Mitsubishi UFJ in New York. "I don't
think the outlook for the second half is that negative, but the jury is
out on this until we see next month's jobs report."
A poor labor market in an election year is
the worst nightmare for Obama and could cost the Democratic Party
dearly in November mid-term elections.
Obama,
who has called job creation his No. 1 priority, has tried to put the
blame on the policies of the previous administration. But Republicans
say a roughly $800 billion package of tax cuts and spending pushed by
Obama has not worked.
"The writing
is on the wall for President Obama's stimulus policies and everyone --
taxpayers, economists, and the rest of the world -- sees it but him,"
said House Republican Leader John Boehner.
With
the economy still in a fragile state, the Federal Reserve is also in a
bind. It has held benchmark overnight interest rates close to zero
since December 2008 and has pumped more than $1 trillion into the
economy.
Fed
officials believe a sustainable recovery has taken hold, but are
watching cautiously and financial markets do not expect the central
bank to raise rates until the middle of next year.
Last month, payrolls in the dominant
services sector rose 91,000 after increasing 20,000 in May. Temporary
help employment rose 20,500, while retail hiring fell 6,600.
In the goods-producing sector, employment
fell by 8,000 after increasing by 13,000, pulled down by declines in
construction. Home building activity has dropped sharply since late
April when a tax credit for homebuyers expired.
Employment in the factory sector, which has
led the recovery, rose by just 9,000 after a gain of 32,000 in May.
Cash-strapped state and local governments were also a drag on employment
last month.
Analysts were
disheartened by the shortening of the workweek to 34.1 hours from 34.2
hours in May and a slip in average hourly earnings. The decline in
earnings is worrisome on two fronts: it could crimp consumer spending,
and it may add to downward pressure on already weak inflation.
"This leaves the Fed on extended hold.
Recent data also heightens concern that the disinflation process has not
yet found a trough," said Michael Feroli, an economist at JPMorgan in
New York.
In June, just over 45
percent of the total 14.6 million people unemployed had been out of work
for more than 27 weeks, little changed from May.
I just finished watching the interview. It's a must see. Rose is totally sucked into it.
(That's a figure of speech...)
I enjoy Charlie Rose but thought this looked more like an infomercial for Krugman.
Rose is clueless...and, when he does manage to get a really interesting guest that I wish to hear expound on a subject, Rose interrupts constantly.
I got so irratated by Rose that I stopped watching his show several years ago.
He is more of a celebrity interviewer. Entertainment over substance.
+1
I want just one of these high-dollar economists/strategists to answer this simple question:
How do we get out of this?
I'd start with the elimination of the Fed; restoring the role or printing currency to the congress and auditing the private banking syndicate before abolishing them completely - again.
Eliminating income taxes so that people aren't persecuted for their hard work. This will shrink government immediately including the military industrial complex.
Ending the war on drugs...$1 trillion wasted and nothing to show but more jails full of non-violent offenders and privatized jail operators making billions off of stolen liberty. Possibly legalizing and taxing drugs so the govt. can earn some revenue.
Just a few ideas to start.
"How do we get out of this?"
By restoring individuals' incentives to work and innovate. Really. The answer lies with the question why does anyone do anything at all?
Stated another way,"How many productive citizens does it take to support one unproductive citizen?" Oh, & unproductive includes most of the gamblers & criminals in the financial sector.
I love that constant talking point about "innovating our way out of this."
Listen real good, jackhole, 'cause I suspect you're not responsibly for any tech creation whatsoever in your puny life.
Those of us who have actually created the technology, again and again, just to watch that tech, along with our jobs consistently and constantly offshored, say eff you and the jackass you rode in on!
Innovate your way to the toilet, bub!
There's no incentive to work for thieves, and that's the majority of corporations today, just criminal outfits.
Get a clue, dood.
Your comment would have been more powerful without the personal attack.
yes, and not just in tech sector. I had a product a potential investor wanted to put money into. When I told them I wanted it manufactured in US (could be assembled by numbskulls, no special skills req'd), they backed out cuz they wanted to outsource it to Vietnam. Told him to get lost.
Good for you. Wish you the best in building America up, not tearing it down. I think there was a perception that, "America is so strong it can never be destroyed." Well it's down to it. We are on the edge of losing it all. Lots of other 'Late Great' countries & Empires thought the same thing; History is littered with them.
Zack:
First, recognize the unemployment problem is STRUCTURAL, NOT CYCLICAL. Pouring trillions of dollars into a jobs toilet is not going to work. Apple, 25,000 U.S. employees, 250,000 Chinese workers. Loss of MANUFACTURING of all types, is what has killed the U.S. economy.
Second, read Andy Grove's article in Bloomberg- an excellent summary of how the loss of MANUFACTURING in the U.S. does indeed kill off the future of a country.
Third, give our man Leo his due. I haven't yet concluded whether Leo simply likes stirring the pot, or that he is indeed a masochist.
Actually we are in perfect position to rebuild our manufacturing base. We shipped all our worn out obsolete smokestack factories to Mexico & China & others. Like Europe at the end of WWII we have a clean slate. Europe rebuilt with state of the art new factories back then. All it would take is for the country to reclaim the national will & common purpose to do it. Having said that we are still hobbled by our greedy & short sighted financial & industrial sector sector. We really should give them an ultimatum; Rejoin America or GET OUT.
Re: I haven't yet concluded whether Leo simply likes stirring the pot, or that he is indeed a masochist.
I haven't either. I've always assumed that he’s saying that: America is a society of dumbass optimists so a fake recovery is as good as a real one, and invest accordingly.
I do know some intelligent people who are Pollyanna optimists though. Their brains are incapable of thinking negative thoughts about the future. It's not their fault, it's just their brain chemisty.
Screw Andy Grove and all those phony, fraudulent revisionist BSers all to hell and back!
Grove and his buddies shipped as many jobs as they could offshore, and when their chip design project in India crapped out (losing them at least $1 billion) they suddenly decide to "reinvent themselves."
Eff them....
Outsourcing is vastly over rated! It is too late for the devastated US economy with all of those jobs that will never return.
Hey Sarg
Breath into a brown paper bag until your pumper slows down. I don't give a fiddler's fig what Grove did with outsourcing in the past. Read the damn article and then you can rant and rave as to whether "insourcing" makes any bloody sense.
Naturally, I can assume you- personally- have never, ever made a mistake.
Grove has articulated a compelling proposal for American job creation. Let him hang his head in shame for outsourcing American jobs, but you should hang your head in shame for denouncing that which you have not even read.
+1. The Grove apologists are disgusting.
Precisely!
http://www.oregonlive.com/business/index.ssf/2010/07/daimler_trucks_swan_island_fac.html
Portland is celebrating the retention of 680 jobs, thanks to big military contract. So not "real" demand, still gov money. I see this everywhere, the only people surviving, building, growing are doing so from gov money.
The article notes, manufacturing jobs in the state have fallen from 232K in 1998 to 163K as of May 2010. Those jobs aren't coming back. Saw the same thing in the Rust Belt in 80s/90s. Those jobs never came back, look at Gary IN, still a ghost town.
One other interesting tidbit in todays Oregonian, became #3 in US in rate of foreclosures. The state thought they had "bypassed" the housing troubles. Bwahahaha!
Update to Hank Paulson's son grifting Portland taxpayers to pay for his soccer stadium, the City approved to give him the money for his playground. This at the same time, Portland parents are in uproar that Public School district wants to cut 66 K-8 PE teachers and 53 Spec. Ed teachers and close schools because of funding problems after they have already cut janitors. They cut the school janitors, gave the contract to a nonprofit employing "handicapped" people. Since drunks and drug addicts are considered "handicapped", parents were outraged when Dick the Drunk and Mike the Methhead showed up for work, not Parapalegic Paul.
Better than fiction, can't make this stuff up!
BTW, FDIC didn't close any banks this week? FDIC site shows last weeks closures, none for this week?
and for our world cup viewers... http://www.youtube.com/watch?v=ur5fGSBsfq8
Yes, and if it's raining people will use umbrellas. This doesn't tell us anything. How about breaking down WHY the recovery will be tepid. WHY private firms are not hiring.
WHY private firms are not hiring.
Waiting for a more politically favorable time to allow a recovery. Why have a recovery when it'd break your narrative?
You're wasting your time. Ever watch any of the popular Spanish language variety shows? Besides hot bikini girls dancing on stage & in cages, there is usually at least one comic relief dwarf to keep everyone entertained.
Leo is the resident comic relief troll @ ZH. He throws out provocative statements that have no basis in economic reality. Take for example, your question regarding "why". Leo probably knows, but will never admit, that the last 30 years were nothing more than pulled forward consumption financed by Wall St/DC ponzi corruption.
Take away the ponzi, and we of course have nothing. It was all a shell; an illusion. But that doesn't serve the comic relief troll's agenda. His is to create conflict, and he achieves his objective(s) with admirable results.
"that the last 30 years were nothing more than pulled forward consumption financed by Wall St/DC ponzi corruption"
Bingo. That's exactly it. And I've never (surprise, surprise) heard anyone on CNBS, etc. talk about this. We have capacity (retail and service orientated) and infrastructure (and debts) to match 2005-2007 demand - which was clearly the peak of un-sustainability. Now demand can't service the debt, much less pay off principal.
I've never understood the "new normal" or "slow-grinding growth" arguments. If you don't reach escape velocity on paying back all of these debts, then the system falls apart. The debt collapses.
While I like the attempt at a contrarian view on ZH, I didn't think this article added any insight to a collection of cut and paste MSM articles.
I dunno, a lot of that debt is to foreigners who made a lot of great stuff for us, and not just consumer items but capital goods and cheap raw materials. We have the stuff and they hold the debt. Just sayin'.
The FIRE sector grew out of proportion when the great Alan Greenspan took over. But the US economy isn't just about Wall Street. Some of the best companies in the world in all sectors are based in the US. Financial Ponzi aside, let's not exaggerate and throw the baby out with the bathwater.
But the problem is, it doesn't matter where they are based if all their concept of business today is (1) issue junk paper, (2) offshore jobs and R&D, and (3) bring in foreign scab workers (and don't anyone tell me those frigging Punjabis aren't foreign scab workers!).
Throwing Congress out with the bathwater would be helpful though.
To be replaced by whom? The peasants vote for sociopaths because that's all their tiny brains are capable of.
The sociopaths will always win until somebody is smart enough to figure out how to keep them from conning the dumbasses.
American first!
Four more wars!
Different clowns, same circus.
47
A mathematician, an accountant and an economist apply for the same job.
The interviewer calls in the mathematician and asks "What do two plus two equal?" The mathematician replies "Four." The interviewer asks "Four, exactly?" The mathematician looks at the interviewer incredulously and says "Yes, four, exactly."
Then the interviewer calls in the accountant and asks the same question "What do two plus two equal?" The accountant says "On average, four - give or take ten percent, but on average, four."
Then the interviewer calls in the economist and poses the same question "What do two plus two equal?" The economist gets up, locks the door, closes the shade, sits down next to the interviewer and says, "What do you want it to equal"?
Christ, that was goooood!
Thanks...
You can add a fractional reserve banker too. They'll turn the numbers into debt and then multiply it many times out to make it far more than it was to start.
An engineer, a physicist, and an economist are trapped on an island with one can of food, but nothing with which to open it. The engineer suggests they attempt to bash it open with coconuts. The physicist speculates that they could fling it fast enough to break it open.
The economist says, "Assume we have a can-opener...".
If Pelosi were on the island she might add: "Assume we are masochists"
The other day she publically said unemployment checks are a stimulus to the economy...that is to say paying people to not work by taking money from people who do at gunpoint. Stimulus!
So then giving money directly to the victims of the financial sector global sh!# storm instead of air dropping money pallets to the perpetrators is a bad thing?
Well, if you had to stimulate the banksters or the unemployed which would get the biggest bang for the buck right now.
The government is just a big loot distrubution machine. You can give the loot to the banksters or the peasants. Most of it's probably going to the banksters, but as I work for a 2Big2Fail Zombie bank I'm just hoping the socialism lasts another 30 years. Then I'll be dead and the universe ends, so - beyond that - who cares.
That's how that has acted, but since Pelosi said it - it gets demonized.
She says that unemployment checks are the best way to create jobs (late 0:20's on).
http://www.youtube.com/watch?v=Ccfd8LbAW60
And I like this word "demonize" in so many ways. If we actually quote her is she self-demonizing? Is that a new San Francisco treat?
- Ned
You got the mathematician wrong:
"Five, for large values of 2."
It might play a little better if you replaced the economist with either a lawyer or a MBA. Economists tend to actually believe their own Sh*t doesn't stink.
"There are no jobs!" -Celente
"The recovery will be tepid, especially if private sector employment doesn't pick up..." ~ Leo.
Er, excuse me for asking, but how can there be ANY recovery without private sector employment picking up...?
edit:
especially if private sector employment doesn't pick up convincingly,
Long term, it's not the number of jobs, it's the quality of jobs.
If the peasants - in the aggregate - don't (at least) maintain their wages they can't pay off their debts.
So sure, “more jobs” might keep the sycophants happy for another round of kick-the-can. But if wages fall, taxes fall, and defaults rise and deficits rise. No income no payments. Pretty simple, really.
Bye, bye middle class. Hello peasant serfs.
Thank you NOT....!! I live in Austin and the job market stinks and everyone thinks their house is worth a mint. As I have been saying for months now, "No significant well paying jobs means you house in NOT worth that obscene price!"
No income, no payments? ... I don't know where you've been; who needs payments when you've got presses to run?
Yes Leo we know you are a big fan of "appearance" and "perception" as the way to connive the sheep into believing there is something positive to cheer but reality trumps your fantasy.
Much like Dennis Kneale you don't care if it's a lie as long as people think otherwise.