Vol. 73/No. 27      July 20, 2009

Some 7.2 million jobs have been cut since the recession began in December 2007. Unemployment has doubled from its 4.8 percent rate 16 months ago.

If you include the 2.2 million people the government doesn’t count, claiming they haven’t looked for work over the past month, and another 9 million forced into part-time hours, the unemployment and underemployment rate rose to 16.5 percent—nearly 26 million workers.

Those out of work for six months or more, many of whom no longer get unemployment benefits, climbed to nearly 4.4 million, a record high. Take-home pay has been cut for about 80 percent of the workforce with the average workweek down to 33 hours. Increasing numbers of employers are also forcing workers to take unpaid leaves.

Over the past several months, government officials have pointed to some statistics indicating that the economy was starting to recover from its precipitous decline. The latest job figures “sprayed some Round-Up on the green shoots,” David Shulman, an economist at the UCLA Anderson Forecast, told the Washington Post. “Green shoots” is the term Federal Reserve chairman Ben Bernanke began using in March to describe what he claims are signs of economic improvement.

A day prior to the release of June’s unemployment figures, the Institute for Supply Management reported that manufacturing activity in June declined at the slowest pace in 10 months. Investor’s Business Daily hailed this as “the latest ‘green shoots’ signal that the recession may have bottomed out.” A Commerce Department report July 2 said factory orders rose 1.2 percent in May, but the steepest decline in jobs continues to be in industrial production and construction. In June 136,000 manufacturing and 79,000 construction jobs were cut. Total jobs eliminated in these two areas since December 2007 are 1.9 million and 1.3 million respectively.

Barack Obama administration officials described the slight reduction in the hundreds of thousands of jobs being slashed each month as a sign that the “stimulus” spending package passed earlier this year is working. From November to March employers cut an average of 670,000 jobs each month. From April to June, this slowed to 436,000 a month.

“We’re seeing a kind of leveling off here,” Labor Secretary Hilda Solis told the New York Times. At the time of its passage, Obama promised the $787 billion “stimulus” plan would save or create 3.5 million jobs over the next two years.

Average unemployment in the 16 European countries comprising the Eurozone rose to 9.5 percent in May, a 10-year high, up from 9.3 percent in April. In Spain the official rate tops 18 percent.

In another development, the number of U.S. banks collapsing this year rose to 52. On July 2 banking authorities shut six regional banks in Illinois and one in Texas. In 2008, 25 banks failed.  
 
 
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