Unemployment rate decline may indicate the recession has hit bottom
Everyone leads with the newest jobs report, which finds new job losses declining to their lowest level in a year, while the unemployment rate sinks slightly to 9.4 percent, compared with 9.5 percent in June.
The Los Angeles Times calls the report a sign that the economy is finally starting to turn around. While 247,000 jobs still disappeared last month, the New York Times writes that the relatively smaller job losses are a sign that businesses are less worried about the future. While that’s hardly good news, it’s still better than many analysts expected, causing the Dow Jones industrial average to rise by 114 points, according to the Wall Street Journal.
In Jobless Rate Dip, a Partial Picture
The Washington Post focuses on the more sobering side of the report, noting that the unemployment rate fell only because 422,000 people have stopped looking for work. If the figures were readjusted to account for these people, the rate would fall at 9.7 percent, the NYT notes. The LAT reports that 14.5 million total people are out of work, while another 8.8 million are able to find only part-time work. The NYT writes that adding those figures together gives the country an unemployed/underemployed rate of 16.3 percent, compared with 16.5 percent last month.
The full article reads:
In Jobless Rate Dip, a Partial Picture
Unemployment dipped in July for the first time in 15 months, but the jobs data released Friday also brought into focus the limits of the budding economic recovery.
The new numbers raised hopes that the recession could be nearing an end. The unemployment rate fell to 9.4 percent, from 9.5 percent in June, and employers slashed 247,000 jobs, the slowest rate of decline in nearly a year.
For all the optimism in Washington and on Wall Street — President Obama said the economy is “pointed in the right direction,” and the stock market rose 1.3 percent — some details in the report show that the labor market remains weak. The stabilization in the economy is not rippling through to ordinary American workers. Economists generally expect the unemployment rate to resume its rise in the coming months, ultimately reaching or surpassing 10 percent.
The July decline in the jobless rate came about not because more people had jobs, but because 422,000 people removed themselves from the labor force, essentially giving up the search for work. The number of long-term unemployed people — those who have been out of a job but looking for more than 26 weeks — rose by another 584,000.
“There’s nothing really happening right now,” said Marc Patterson, 31, a Southeast Washington resident unemployed for seven months who had little luck finding work as a janitor. “There aren’t too many jobs.”
And the number of jobs with employment services companies continued declining in July. Increases in that number tend to forecast broader gains in employment as companies reluctant to hire permanent employees bring on temps to handle rising demand.
“If we don’t see temp jobs go positive by September or October, in my mind, that would indicate we’ve got a longer way to go,” said Roy G. Krause, chief executive of Spherion, a large employment services firm. His own company saw modest growth in demand for workers in the second quarter, he said, as “some employers have cut back a little bit too much and therefore they’re starting to add a few people.”
The ongoing weakness in the job market is the key factor leaning against a robust recovery. The unemployment rate almost always lags at the end of recessions — sometimes by long periods of time — and many economists expect the unemployment rate to resume rising in the months ahead.
That is because as companies stop laying off workers in massive numbers, moderating the rate of job losses, those who have given up looking for work may re-enter the labor force — a major risk to an otherwise improving outlook.
“We’re still headed pretty quickly to 10 percent unemployment,” said Lawrence Mishel, president of the Economic Policy Institute, a liberal-leaning think tank. “Unemployment will be rising for the next year or more.”
And while the rate of job loss in July was slower than economists forecast, it still represents what is, by conventional measures, a very rapid contraction. Employers need to create around 150,000 jobs a month just to keep up with population growth, so it would take a major reversal for conditions to improve.
“We’re stabilizing the patient, but the patient is still sick,” Labor Secretary Hilda L. Solis acknowledged in a conference call with reporters Friday.
There were signs of progress in the report. The average workweek ticked up slightly, to 33.1 hours, from an all-time low of 33 hours in June. The number of people working part-time who want a full-time job fell by 191,000, the second straight month of decline. Those numbers suggest that at least some employers are starting to reverse the cutbacks in workers’ schedules.
And the picture for payroll employment improved across many categories. There were gains not just in government employment, but in the leisure and hospitality sector and in education and health services. Even those sectors that continue shedding jobs are now doing so at a slower pace. The 52,000 jobs shed by manufacturers were the fewest lost by that sector in a year.
Another positive sign: The Labor Department revised upward its earlier, more negative estimates for job losses in June, suggesting those numbers were not as dire as first reported.
The Obama administration is in a tricky position, aiming to take credit for a stabilizing economy as it reminds people how much worse conditions were last winter, all while also appearing sympathetic to those who remain in dire employment situations. “We won’t rest until every American that is looking for work can find a job,” Obama said in the Rose Garden on Friday, also saying that the nation is beginning to put an end to the recession.
The rising number of the long-term unemployed is a particular problem for the administration since a growing number of people are facing the expiration of unemployment benefits. Solis said the administration will work with Congress to find a fix.
As Economy Turns, Washington Looks Better
If the recession turns out to be milder than expected, it’s going to be because of swift, sizable government intervention program—at least according to the NYT. No, the paper doesn’t offer any evidence establishing a causal link between financial rescue efforts and economic health. Instead, the author points to historical examples of governments that decided not to intervene in a financial crisis, with disastrous results following close behind.
Death of Pakistani Taliban leader Mahsud a major victory for U.S., Pakistan
The papers all off-lead with reports that Pakistani Taliban leader Baitullah Mehsud was killed by a missile fired from an unmanned CIA airplane last Wednesday. The LAT is the most ebullient about the strike, hailing it as a great blow to the Taliban in that country. Mehsud was the most wanted man in Pakistan, having organized the killings of approximately 1,200 people, including former Pakistani Prime Minister Benazir Bhutto.
The WP is a little more cautious, noting that while Mehsud was the link holding the county’s 13 Taliban factions together, killing him may prove to be just a temporary solution.
The NYT is even more skeptical, as analysts note that counterterrorism operations tend to focus too much on eliminating marquee figures. Everyone notes that Mehsud’s death puts the onus on Pakistan to take advantage of this moment and pursue remaining Taliban figures.
Even for the Experienced Sotomayor, Many Changes Await
The WP fronts a look at difficult transition facing newly confirmed Supreme Court Justice Sonia Sotomayor. Her first case will involve a test of the court’s previous rulings on campaign finance issues—a little awkward for someone who just joined the team. The paper writes that joining the court is a learning experience for every new member, so scrutinizing Sotomayor’s early actions on the bench probably isn’t terribly useful, especially since many justices’ ideological positions shift in the years following their appointment.
Health Debate Turns Hostile at Town Hall Meetings
All over the country, members of Congress are back in their districts for the August recess, taking the pulse of their constituents on a range of issues, most notably health care reform. And wherever there’s a congressman holding a town hall meeting on health care, there’s someone shouting over the top of the member’s comments, according to the NYT. While these might seem like spontaneous displays of voter passion, however, they’re actually planned demonstrations by conservative lobbying groups, including the organization responsible for last spring’s “tea parties.”
A Town-Hall Protest in Maryland
The protestors can misbehave. At a town hall he hosted in the Napa Valley on Monday, California Democratic Rep. Mike Thompson watched some in the crowd of 500 people shout down panelists. A spokesman for North Carolina Democrat Rep. Brad Miller has told reporters that his boss won’t be holding town hall meetings this month after receiving a death threat.
But the discontent is neither faked nor staged by the GOP. At the Mardela Springs event I attended, the parking lot was filled with Maryland license plates, the speakers made references to local areas and events, and everyone of the several people I spoke with lived in the congressman’s district. They were just upset and worried that the reforms Democrats were bent on enacting would hurt the economy and their ability to get the health care they needed.
This crowd was probably far more representative of the national mood than Mrs. Pelosi realizes. Mardela Springs is about 100 miles from the nation’s capital, on a strip of land that sits between the Atlantic Ocean to the east and the Chesapeake Bay to the west. The district is filled with farms and is populated by farmers, mariners and retired beach bums. “We are not very political people. We are just ordinary people with ordinary concerns,” said Salisbury businessman Earl Nelson, who told me he voted for Mr. Kratovil. “But we are very concerned. I just hope he understands that.”
U.S. and Britain Again Target Afghan Poppies
As part of a continuing effort to get farmers in Afghanistan to stop planting poppies, the U.S. and British governments are about to launch a multimillion-dollar program aimed at encouraging other kinds of crops, according to the WP. The idea is to ease the nation’s farmers off drug farming, thereby denying corrupt politicians and the Taliban of vital funding. Of course, the paper admits that the U.S. government has tried this sort of thing before in other countries and met with decidedly mixed results.
Attacks on Homeless Bring Push on Hate Crime Laws
The number of unprovoked attacks against homeless people is on the rise, reports the NYT. Experts point out that 58 percent of these attacks are perpetrated by teenagers.
Full article: http://www.nytimes.com/2009/08/08/us/08homeless.html
It’s Time to Stay the Courier
In the NYT‘s business section, Joe Nocera takes a look at the staggering challenges facing the U.S. Postal Service.
Full article: http://www.nytimes.com/2009/08/08/business/08nocera.html
Reality Check, Please
Celebrity chef Gordon Ramsay made a name for himself helping struggling restaurants turn themselves around. Now the WSJ says he’s got to fight to keep his own eateries open in the face of a difficult recession.
Full article: http://online.wsj.com/article/SB124967205185415131.html
Terror Comes in the Shape Of Summertime Footwear
Really, really hate flip-flops? The WP notes the peculiar brand of rage that the seemingly innocuous footwear instigates in some people.
Full article: http://www.slate.com/id/2224769/