A drop in the labor force coupled with an increase in the number of unemployed resulted in what many experts labeled a dismal jobs report Friday.
Nationally, new hires in June were the fewest in nine months and the unemployment rate rose slightly to 9.2 percent. The U.S. Labor Department study indicated bad signs for the recently unemployed, as those that have been jobless for five weeks or less jumped by 412,000 from May to June.
“Our economy as a whole just isn’t producing nearly enough jobs for everybody who is looking,” President Barack Obama said Friday in reaction to the report.
Uric Dufrene, Sanders chair of the Indiana University School of Business, said employers only added 18,000 jobs last month when 100,000 new positions were anticipated.
“All around, the report was quite negative,” Dufrene said.
Beyond the employment numbers, Dufrene said the average weekly earnings for employees dropped last month — another indicator of a sluggish economy.
“No doubt, the stagnant wages and higher food and energy prices are constraining household budgets,” he said.
The under employed also must be considered when reviewing jobs reports, Dufrene continued. The U6 rate is an alternative measure used to calculate the people who are working part time, but that desire a full-time position, as well as those that dropped out of the labor force but still want to work.
The U6 rate also increased in June from 15.8 percent to 16.2 percent.
“Overall, this is one of the worst reports we have seen in quite some time,” Dufrene said.
Positive non farm payroll gains won’t happen consistently until weekly unemployment claims fall to less than 400,000, Dufrene predicted.
“Given this report, I do expect some continued slow growth for [the Louisville Metro Statistical Area] over the next quarter,” he said.
U.S Rep. Todd Young, a Republican representing Indiana’s 9th District, faulted the Democratic led Senate and Obama for refusing “to join us in charting a new way forward” despite the poor job numbers.
“Over the past six months, the House has passed a budget that would cut spending and get our economy back on track, only to see the Senate fail to act,” Young stated in a news release.
“If we want to get our economy moving and create jobs in this country, we must act now to show we are serious about reversing course by getting our spending and debt under control.”
Congress and Obama remain in negotiations over increasing the national debt ceiling, the budget and federal spending.
Young said “the last two years of trying to spend our way out of this recession has failed.”
White House economists estimated the unemployment rate would be less than 8 percent if Congress passed the Obama stimulus plan in 2009, and the measure was ultimately approved.
Young said it’s time for a new direction, but the Senate remains an obstacle for Republican proposals.
The House has “passed numerous bills that would restore certainty to the market place, ease the burden of over-regulation and fear of tax increases, and most importantly put Hoosiers back to work,” Young said.
“These, too, remain stalled in the Senate.”
The Associated Press contriubuted to this report
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Uric Dufrene
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Congressman Todd Young, 9th District, Republican.
Discussion
Employment report ‘quite negative’
Jobless rate up, labor force down nationally
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