The job market shrank in July for the seventh straight month and the unemployment rate hit a four-year high, the Labor Department reported today. Employers cut 51,000 nonfarm jobs last month, and the unemployment rate hit 5.7 percent, up from 5.5 percent in June and 4.9 percent at the start of the year. While the government beefed up its payrolls by 25,000 in July, the private sector continued to buckle, losing 76,000 jobs last month. The construction and manufacturing industries have together lost 561,000 jobs so far this year.
Also worth noting: The number of Americans who want full-time jobs but are working part time has risen by 1.4 million in the past year, and the average workweek for private, nonfarm production workers dropped to 33.6 hours.
Here are six takes on what it means for your employment and economic prospects:
"The combination of a higher unemployment rate and weaker hours worked makes this a weaker-than-expected report and further adds to the case that the U.S. is in recession." —John Ryding and Conrad DeQuadros of RDQ Economics
"The labor market is a lagging indicator of economic activity, and job declines so far this year reflect weakness in the overall economy in late 2007 and early 2008. Still, the recent decline in jobs is much smaller than has been typical of past periods of economic weakness. We think Q2 real GDP growth, reported yesterday at a 1.9% annual growth rate, will be revised up in the months ahead and that the US will grow at about a 3% rate in the second half of 2008. As a result, we believe the worst job losses are behind us and expect payrolls to turn positive again sometime in the next few months." —Brian Wesbury and Robert Stein of First Trust Advisors
"[The] report is weaker than the headline looks since the workweek shrank to 33.6 hours. Hours worked fell by 0.4 percent month-to-month." —Robert Brusca, chief economist at Fact and Opinion Economics
"The banking crisis, high oil prices and the large trade deficit with China are causing employers to relocate to Asia rather than endure in the U.S. Tsunami.... Going forward, the economy will add some jobs for college graduates with technical specialties in finance, health care, education, and engineering. However, for high school graduates without specialized technical skills or training and for college graduates with only liberal arts diplomas, jobs offering good pay and benefits remain tough to find. For those workers, who compose about half the working population, the quality of jobs continues to spiral downward." —Peter Morici, professor at the University of Maryland School of Business and former chief economist at the U.S. International Trade Commission
"The labor market continued its slow-motion decline in July with another 51,000 jobs lost. Though the decline wasn't huge, it was very broadly based, with only healthcare and mining showing anything that could be described as strength. Hours worked per week declined, which is a bad sign for future hiring." —Nigel Gault, chief U.S. economist at Global Insight
"Unemployment among teenagers has increased nearly 5 percentage points over the past three months and teenagers appear to have accounted for roughly two-thirds of the increase in the unemployment rate during July. The higher teenage unemployment rate coincides with the second installment of the increased minimum wage.... The higher minimum wage means that teenagers now must compete with more experienced workers for jobs." —Mark Vitner, senior economist at Wachovia Economics Group