For Immediate Release
Statement: Chad Stone, Chief Economist, on the June Employment Report
WASHINGTON - The good news in today's jobs report is that the private sector
continued adding jobs in June - though, as expected, the economy lost
jobs overall due to the scheduled reduction in temporary census jobs
(see chart). The bad news is that private sector job creation must be
much stronger going forward- at least 200,000 to 300,000 jobs per month
- to bring people back into the labor force and lower the unemployment
rate at the same time. Unfortunately, hopes that Congress will enact
effective jobs measures are fading fast as too many lawmakers seem to
think that their immediate priority should be the budget deficit rather
than the jobs deficit.
Efforts to pass an adequate jobs bill
unraveled in recent weeks, and Congress did not pass even minimal
measures before leaving for its July 4th recess to help unemployed
workers who are exhausting their benefits and states struggling to
close their gaping budget shortfalls. That not only means more hardship
for many individuals, but also additional obstacles for an economic
recovery that is struggling to gather steam.
won't have as much money to spend and will cut back their purchases.
States will have to raise taxes, lay off workers, cancel contracts and
scale back programs even more than they otherwise would. Reduced
spending by unemployed workers, newly laid-off state employees, and
state contractors who lose business will be a significant drag on the
recovery and will impede job growth. Temporary unemployment insurance
benefits and state fiscal relief are two of the most effective measures
to stimulate economic growth and job creation. A smaller program, the
TANF (Temporary Assistance for Needy Families) emergency fund, is one
of the most cost-effective job-creating programs we have.
they all languish in legislative limbo because many lawmakers believe
that Congress must offset such measures with tax increases or spending
cuts to keep the budget deficit from increasing. This is seriously
misguided. Not only is the impact of these temporary measures on the
long-term budget deficit minimal, but requiring contemporaneous deficit
offsets would reduce or undo the job-creating effects of the measures
they are paying for.
Congress needs to act quickly when
lawmakers return from recess to renew unemployment insurance benefits
and extend state fiscal assistance and TANF emergency funds. Today's
jobs report shows that the economy can use all the help it can get to
stimulate a faster pace of job creation.
About the June Jobs Report
labor market remains mired in a deep slump with weak underlying job
growth, many more people looking for work than there are new jobs being
created, and a disturbingly high unemployment rate.
and government payrolls combined fell by 125,000 jobs in June. Private
payrolls rose by 83,000 jobs, while government payrolls fell by
208,000. Government reductions were dominated by the scheduled
elimination of 225,000 temporary jobs associated with the decennial
census, but state and local payrolls also shrank by 2,000 and 8,000
jobs, respectively (non-Census federal employment rose slightly). There
are 7.5 million fewer jobs on nonfarm payrolls than there were when the
recession began in December 2007 and 7.9 million fewer jobs on private
- So far this year, private sector job creation has averaged 99,000 jobs per month.
unemployment rate edged down to 9.5 percent in June, the lowest it has
been since last July, and the number of unemployed fell slightly to
14.6 million. Unfortunately, the decline in unemployment was due to
people leaving the labor force rather than an increase in the number of
people with jobs.
- The labor force participation rate (the
percentage of people with a job or actively looking for a job) has now
declined for two straight months and is back to where it was at the
start of the year-and 1.3 percentage points lower than it was at the
start of the recession.
- The number of people with a job
(which is estimated from a different survey from the one used to
estimate payroll employment) fell slightly in June. As a result, the
percentage of the population with a job edged down to 58.5 percent.
Both the labor force participation rate and the percentage of the
population with a job remain near lows that were last seen in the 1980s.
Labor Department's most comprehensive alternative unemployment rate
measure - which includes people who want to work but are discouraged
from looking and people working part time because they can't find
full-time jobs - edged down to 16.5 percent in June. While that figure
is below the peak of 17.4 percent reached in October 2009, it is still
- Long-term unemployment remains a significant
concern. Over two-fifths (45.5 percent) of the 14.6 million people who
are unemployed - 6.8 million people - have been looking for work for 27
weeks or longer. These long-term unemployed represent 4.4 percent of
the labor force. Prior to this recession, the previous highs for these
statistics over the past six decades were 26.0 percent and 2.6 percent,
respectively, in June 1983.
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