The Progressive


A project of Common Dreams

For Immediate Release
Contact: Michelle Bazie,202-408-1080,

Statement: Chad Stone, Chief Economist, on the June Employment Report


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.

Unemployed workers
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.

  • Private
    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.
  • The
    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.
  • The
    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
    quite high.
  • 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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