Over 40 months of previous unemployment rates has led to another month of over 8 percent unemployment with July figures not showing any change to the continuing trend. Only 163,00 jobs were added to the sluggish economy leaving 8.3 percentage of the U.S. still unemployed, an increase of 0.1 percent from the previous month.
July’s hiring numbers wads the best this nation has seen since February but was still not enough to bring a decline in the unemployed, nor the rate of 48 percent of all Americans that live either in the “low income” or poverty level.
“After a string of disappointing economic reports … we’ll certainly take it,” said James Marple, senior economist at TD Economics.
College graduates though have not been so receptive where at least 50 percent or more under the age of 25 are underemployed or unemployed.
Unemployment rates are based on household surveys of those unemployed in comparison to the actual labor force. In July the reported surveys conducted indicate figures where there were more people unemployed combined with labor force figures showing a decline in the job market.
However, economists do not utilize these figures instead they use business surveys and in July there were job gains reported.
The political campaign side of the unemployment rate shows that since the first month Barak Obama took office the unemployment rate was then above 8 percent. In looking over presidential campaigns and the candidates under reelection since World War II, no president has been reelected with unemployment rates above 8 percent.
For a favorable economic outlook to occur economists are pretty much in agreement that the job gains need to be much greater than July’s performance. Although they see July as somewhat of a relief from the last several months.
Senior U.S. economist for Capital Economics, Paul Ashworth, commented on July’s job gains as a “vast improvement” over the past four months. In comparison to December 2011 through February of this year where job gains were still well below the average of 252,000 jobs added back then.
“It also isn’t strong enough to drive the unemployment rate lower, which is what the Fed really wants to see. So, on balance, we doubt this would be enough to persuade the Fed to hold fire in September,” Ashworth said.
Of the new jobs created they were pretty much spread across the board with Education and health services reporting the highest increase of 38,000, followed by Restaurants and bars adding 29,000 and Retailers providing 7,000 more opportunities for workers. Governments though did not fair as well by cutting 9,000 positions.
In spite of July’s gains in the job market the economy is still weak even after more than three years ago when economists declared then that the recession had ended in June 2009. In 2011, the figures did not reflect their position with economic growth slowing to a rate 1.5 percent from the quarter of April through June, a 2 percent decline from the first quarter and 4.1 percent decline of the final quarter of 2011.
The additional job growth in the manufacturing sector in July did not coincide with the results of the private surveys which showed manufacturing activity actually shrank for the second straight month. The response with consumers was equally unimpressive with their weak response and continued lack of confidence in spite of the manufacturing gains.
The European financial crisis weakening the eurozone economy is also impacting U.S. exports leaving many wondering if the U.S. economy will eventually sink to serious levels by the end of the year. If proper measures are not passed to elevate the response from tax budget cuts scheduled for the beginning of next year, we may see the message Ben Bernanke expressed of a recession to follow.
Already Americans households have taken measures in their own hands by curtailing spending and saving more, evidenced by a decline in consumer spending for the second quarter. Reported economic figures for the second quarter show there was an annual growth rate of 1.5 percent representing a decline of 2.4 percent from the first quarter report of 3.9 percent. Indicating a financial economic decline and sign of a potential recession to come.