San José, CA – On July 8, the U.S. Department of Labor released its report on unemployment and new job creation for the month June. The report said that the unemployment rate rose for the third month in a row to 9.2%, while only 18,000 new jobs were created. The job creation was much worse than most mainstream economists expected, and was less than one-tenth as many new jobs as in February, March and April. The number of new jobs created in May was revised down from a weak 54,000 to an even worse 25,000.

African Americans continued to be the worst hit by unemployment, with an unemployment rate of 16.2%, twice the rate of whites. This is the highest unemployment rate for Blacks since 1984. A broader measure of unemployment, including those who gave up looking for work and people forced to work part-time because of a lack of full-time work, rose to 16.2%, or about one in every six workers.

Another sign of the bad jobs situation was the latest report on new applications for unemployment insurance on July 14, which was above 400,000 for the 14th week in a row, after falling below this level earlier in the year. Temporary help service jobs, which often lead changes in other types of employment, were down 12,000 in June for the third month in a row.

In addition to the headline unemployment rate and job creation numbers being poor, digging deeper into the report showed only more bad news. Despite the gain of 1.75 million jobs since February of 2010, there are still almost 7 million fewer jobs than when the recession began in December of 2007. At the current rate of job creation, it will take more than five years just to make up what was lost in the recession.

The number of hours worked on average fell. This is a bad sign since companies will often increase hours before hiring new workers and cut hours before laying off workers. The average hourly earnings also fell by a small amount, showing the workers are taking lower pay despite the rising cost of goods and services (which were up 3.6% year over year in June). Other signs pointing to a weak job market included the increase in the length of unemployment for the typical jobless worker. This median length rose to 22.5 weeks.

The rise in the unemployed was topped by an ever greater number of jobless workers giving up looking for work, so that they were no longer counted as unemployed. The broadest measure of employment, the ratio of the number of people with jobs to the total population, dropped to 58.2 (100 would mean everyone has a job – including children, etc.) There hasn’t been a lower ratio since July of 1983, during the worst recession before the last recession began in December 2007. To get the economy back to the employment/population ratio of 62.7 when the recession began, the economy would have to add some 14 million jobs, which would take more than ten years at the current rate.

Local, state, and the federal government also continued to shed jobs, cutting a total of 39,000 jobs in June. The biggest loss came from local governments, who cut 18,000 jobs in June and more than 450,000 since the peak more than two years ago. About half these job losses, or more than 230,000, have been teachers and other school workers.

One of the big threats that the job market faces right now is the attempt by politicians of both parties to make big cuts in federal government spending. Not only would this increase the number of federal job losses, but attempts to cut Medicare and Medicaid spending would slow down or even reverse job gains in health care, one of the very few industries that is growing, up 950,000 jobs since the recession began.

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