| GEO Business|
| US jobless claims surge more than expected|
| Updated at: 1344 PST, Saturday, July 03, 2010|
WASHINGTON: The employment report for June released by the US Labor Department confirms that the United States is in the grips of a protracted economic slump with no recovery in sight. If anything, the report suggests that the economic situation would best be described as a depression, rather than the official designation of a slow “recovery.”
The Labor Department reported a net loss of non-farm jobs of 125,000, primarily due to the expiration of 225,000 temporary US Census government positions.
However, the private sector generated a mere 83,000 net jobs, well below economists’ projections and barely half the number of new jobs needed to keep pace with the normal monthly growth of the labor market.
According to Friday’s report, two-and-a-half years after the official start of the recession in December of 2007, there are now 15.2 million workers who are unemployed and 25.8 million who are either unemployed or underemployed. Some 6.8 million have been unemployed for more than 6 months. The official underemployment rate including workers who have given up looking for a job and part-time workers who want a full-time job stands at 16.5 percent.
Perhaps the most disturbing aspect of Friday’s report, ironically, is the nominal fall in the official jobless rate to 9.5 percent from 9.7 percent in May. This is because the decline is due entirely to a contraction in the statistical labor force, a result of the staggering growth of long-term unemployment.
The official labor force shrank by 652,000 workers, primarily due to long-term jobless people giving up looking for work and therefore no longer being counted for the purposes of estimating the unemployment rate. Had these so-called “discouraged” workers continued to look for work, the official rate for June would have been 9.9 percent.