plus 3, Employers Shed 131,000 Jobs in July - Daily Finance

Employers Shed 131,000 Jobs in July - Daily Finance
Another Bruising Month for the U.S. Job Market - Daily Finance
MichBio launches new career site for bioscience industry - MLive.com
More jobs needed to lift consumers, drive recovery - Yahoo Finance

Employers Shed 131,000 Jobs in July - Daily Finance

Posted: 06 Aug 2010 07:09 AM PDT

Private employers added new workers at a weak pace for the third straight month, making it more likely economic growth will slow in the coming months. The jobless rate was unchanged at 9.5 percent.

The Labor Department said Friday that companies added a net total of 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate.

Overall, the economy lost a net total of 131,000 jobs last month, but that was mostly because 143,000 temporary census jobs ended.

Stock futures fell after the report's release. Futures for the Dow Jones industrial average were up 30 points before the announcement, but are now down 70 points.

The department also said that businesses hired fewer workers in June than it had previously estimated. June's private-sector job gains were revised down to 31,000 from 83,000. May was revised up slightly to show 51,000 net new jobs, from 33,000.

The "underemployment" rate was the same as in June, at 16.5 percent. That includes those working part time who would prefer full-time work and unemployed workers who've given up on their job hunts.

All told, there were 14.6 million people looking for work in July. That's roughly double the figure in December 2007, when the recession began.

Even if hiring picks up, it will take years to regain all the jobs lost during the recession. The economy lost 8.4 million jobs in 2008 and 2009. This year, private employers have added only 559,000 jobs.

Friday's report is being closely watched by the Federal Reserve as it considers ways to energize the recovery. The report will likely put pressure on the Fed to take new steps to boost the economy and keep interest rates at record lows when it meets next week.

Without more jobs, consumers won't see the gains in income needed to encourage them to spend more and support economic activity. Even those with jobs may not feel confident enough to ramp up their spending.

That's important because many of the trends driving economic growth earlier in the recovery are fading. Companies boosted production in the winter and spring to rebuild inventories that were depleted in the recession. But that boost is fading. And the impact of the federal government's stimulus package is also declining.

The economy grew at 5 percent in the fourth quarter last year and 3.7 percent in the first three months of 2010. But that slowed to 2.4 percent in the April-June period. That's not fast enough to generate jobs and reduce the unemployment rate.

Many companies appear to be getting more out of their current employees rather than adding new staff. The average work week increased by one-tenth of an hour to 34.2 hours, the department said. That's up from about 33 hours in the depths of the recession.

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Another Bruising Month for the U.S. Job Market - Daily Finance

Posted: 06 Aug 2010 07:02 AM PDT

A hot summer that's gripped much of the U.S. has been accompanied by a stone-cold job market. That trend held fast last month as the economy added just 71,000 private sector jobs, after excluding the loss of temporary U.S. Census and other government jobs, the U.S. Labor Department announced Friday. Overall, the economy shed 131,000 jobs in July.

July's modest 71,000 gain in private payrolls was less than the 100,000 economists had forecast. The number of temporary U.S. Census workers fell by 143,000, and government jobs overall declined by 202,000.

Equally significant, June's total was revised to a loss of 221,000 jobs, worse than the previously estimated 125,000 cuts, including a gain of just 31,000 private sector jobs, down from the initial estimate of 83,000.

A Bloomberg survey had expected the economy to lose 70,000 jobs in July, but to add 100,000 private sector jobs. July's job loss total was the second straight monthly drop in jobs this year.

The Official Jobless Rate Remains 9.5%

July's poor private sector job gain may prompt the U.S. Federal Reserve to implement additional measures to stimulate a U.S. economy that's operating well below potential and that hasn't created nearly enough full-time jobs for the estimated 22 million to 23 million Americans seeking full-time work.

The unemployment rate in July remained at 9.5%. But that modest good news stems in part from fewer people looking for work, meaning they're not officially counted as unemployed even though they're without work. That rate, called the workforce participation rate, dipped to 64.6% in July from 64.7% in June.

Underemployment has also been a persistent problem in this recovery, and it didn't improve last month. This alternative measure of unemployment, which includes both part-time workers who want full-time work and discouraged workers, held steady at 16.5%.

Manufacturing Keeps Adding Jobs

July's report did contain a few bright spots. The average workweek increased by 0.1 hour to 34.2 hours. Average hourly earnings increased 4 cents to $22.59 per hour.

Also, the manufacturing sector -- which has led the U.S. economic recovery to date -- added 36,000 jobs and has now created about 172,000 jobs since December 2009. Health care rose by 27,000 jobs and has now added 231,000 jobs in the past 12 months. Transportation/warehousing added 12,000 jobs, and mining rose by 7,000.

However, retail added just 6,700 jobs. And temporary positions -- a rise in which historically has preceded increases in permanent positions -- dropped by 6,000 in July. Also, the financial services sector lost 17,000 jobs, professional/business services lost 13,000 jobs, and construction lost 11,000 jobs.

Despite a few positive sectors, the overall state of the U.S. labor market has to be characterized as still weak. About a year into the recovery, the U.S. economy still isn't creating the roughly 150,000 to 200,000 private sector jobs per month needed to reduce unemployment and help the recovery ascend to a self-sustaining status.

U.S. Productivity Cuts Both Ways

One of the ironies of the U.S. economy, and a factor that's complicating the employment situation, is that one of the nation's strengths -- productivity -- is a two-edged sword.

Aided by technology and perpetual expense discipline, among other factors, U.S. productivity continues to increase at an impressive rate --at a 3% pace in the last 12 months and at a 4% rate in the first quarter of 2010.

The upside is that corporate earnings have been boosted, and that's enabled many U.S. companies to amass healthy amounts of cash -- factors that are bullish for stock prices and give many corporations an advantage over foreign competitors.

But during the early post-financial-crisis era, the downside of that increased productivity is becoming more clear to economists and job-seekers alike: High productivity and more-efficient business models mean many businesses don't have to hire as soon or in the volume they did during past recoveries.

The result is fewer new jobs than the nation would typically see early in an expansion. At minimum, it's certainly delayed hiring by super-efficient firms. And so far during this recovery, it has kept the U.S. unemployment rate from finding the down-slope.

Innovation Could Save the Day -- Again

Of course, the compelling question for investors and job-hunters alike is: What will it take to get the great American job-creation machine rolling again?

DailyFinance's Peter Cohan makes a strong case that the key is technology-led growth, or innovation, and if history offers any precedent, these forces will likely play a pivotal role again.

That's not to sugarcoat the task ahead for the nation. Seven million Americans were looking for work before the start of the 2007-2009 recession that eliminated roughly 8 million more full-time jobs. Add those millions of underemployed people, and the result is an enormous job hole.

But investors and job-seekers should also note this: After each period of job loss, the U.S. economic system has shown a remarkable ability to adapt, reorganize and find new engines of growth. After each economic upheaval the country has endured, the U.S economy adapted and retooled. Americans retrained, and new sectors were discovered. Chances are they will again.

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MichBio launches new career site for bioscience industry - MLive.com

Posted: 06 Aug 2010 06:55 AM PDT

Published: Friday, August 06, 2010, 9:57 AM Updated: Friday, August 06, 2010, 10:01 AM

MichBio, the trade association for Michigan's biosciences industry, has added a new, online MichBio Career Center dedicated to serving employers and job seekers in the biosciences space.

Job seekers can set up free accounts to upload resumes and receive automated emailed job alerts. Resumes can also be posted anonymously.

Ann Arbor-based MichBio represents the more than 500 bioscience-related companies in the state.

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More jobs needed to lift consumers, drive recovery - Yahoo Finance

Posted: 06 Aug 2010 05:29 AM PDT

Christopher S. Rugaber, AP Economics Writer, On Friday August 6, 2010, 9:43 am

WASHINGTON (AP) -- Companies showed a lack of confidence about hiring for a third straight month in July, making it likely the economy will grow more slowly the rest of the year. The unemployment rate was unchanged at 9.5 percent.

Private employers added a net total of only 71,000 jobs in July, far below the roughly 200,000 needed each month to reduce the unemployment rate.

Overall, the economy lost a net total of 131,000 jobs last month, the Labor Department said Friday, mostly because 143,000 temporary census jobs ended.

Investors reacted by selling stock futures and shifted into safer investments such as Treasury bonds. The yield on the 10-year Treasury note, which helps set interest rates on mortgages and other consumer loans, fell to 2.87 percent from 2.91 percent late Thursday.

The department also revised down its jobs figures for June, saying businesses hired fewer workers than previously estimated. June's private-sector job gains were lowered to 31,000 from 83,000. May's were raised slightly to show 51,000 net new jobs, up from 33,000.

"There is still a labor market recovery, but it's a very, very weak one," said Nigel Gault, chief U.S. economist at IHS Global Insight.

The slow pace of hiring will weigh on the recovery, he said, with economic growth in the current quarter likely to come in even lower than the April-to-June quarter's already weak 2.4 percent.

The "underemployment" rate was the same as in June, at 16.5 percent. That includes those working part time who would prefer full-time work and unemployed workers who've given up on their job hunts.

All told, there were 14.6 million people looking for work in July. That's roughly double the figure in December 2007, when the recession began.

Friday's report is being closely watched by the Federal Reserve as it considers ways to energize the recovery. The report could persuade the Fed to take new steps to boost the economy and keep interest rates at record lows when it meets next week.

That's important because many of the trends driving economic growth earlier in the recovery are fading. Companies boosted production in the winter and spring to rebuild inventories that were depleted in the recession. But that boost won't last much longer. And the impact of the federal government's stimulus package is also declining.

Average hourly pay also rose 4 cents to $22.59, up 1.8 percent from a year earlier. That, along with the increase in hours worked, could provide some boost to spending.

The number of temporary jobs fell by 5,600, the first drop after nine months of gains.

Employers usually hire temp workers if they need more output but don't want to hire permanent employees. But "firms aren't even adding temporary workers right now," Gault said.

Manufacturers added 36,000 jobs in July, slightly above its monthly average this year. Those gains were aided by General Motor's decision to keep its plants running last month. Usually it closes them and temporarily lays off employees to retool for the new model year.

Construction firms cut jobs for the third straight month, losing 11,000, while financial firms shed 17,000 workers.

But retailers added 6,700 jobs. And the leisure and hospitality industry hired 6,000 additional staffers.

Corporate net income rose sharply in the second quarter, but businesses aren't yet using the proceeds to ramp up hiring. Companies in the S&P 500 index reported a 46 percent increase in net income for the April-to-June period, compared to a year earlier.

But many employers are uncertain about the direction of the economy. Some are concerned sales will slow once government stimulus and other temporary factors fade. Others fear what will happen if federal income taxes are allowed to rise next year as tax cuts enacted by President George W. Bush expire.

"People have a long worry list they're looking at," said Ethan Harris, chief economist at Bank of America Merrill Lynch.

Some companies are adding permanent workers. The hospital chain HCA Inc. has 8,300 open positions, company spokesman Ed Fishbough said. That includes nurses, physicians and information technology professionals needed to build HCA's ability to handle electronic medical records. HCA employs about 190,000 people.

But layoffs are also continuing. FBR Capital Markets, an investment bank based in Arlington, Va., cut its work force by about 15 percent in early July to about 500 employees, saying it needed to reduce costs.

AP Business Writers Stephen Bernard and Tali Arbel in New York contributed to this report.

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