For all his boasting about the “world’s greatest economy,” Trump’s first year in office pales behind 2024, in the last year of the Biden administration, when more than 750,000 jobs were created, more than 60,000 a month, four times the 2025 figure. What did boom in 2025 was the stock market, with the broad index of the S&P 500 up by almost 18% that year. But half of all stocks are owned by the top 1% of billionaires and mega millionaires, while the bottom 50% of the population who have to work for a living only own 1% of all stocks.

This update on the labor market actually brings the official jobs numbers more in line with other, more negative measures of how working people are doing. Consumer sentiment surveys have cratered, the University of Michigan index going from 71.7 in January to only 52.9 in December. This reading was lower than the low numbers during the past recessions going back to 1980, when working people were hit by the “double whammy” of high inflation (the Consumer Price Index or CPI rose more than 14% that year) and high unemployment (of almost 8%). The Consumer Sentiment Index bottomed out at 51.7 that year.

The economic struggle of working people could also be seen in the rising rate of borrowers falling behind on paying their loans. The delinquency rate on household loans rose to 4.8% in the last three months of 2024, the highest since 2017. This increase was driven by more and more home buyers falling behind on their mortgages and former college students falling behind on their student loan payments. Low income and younger borrowers were hit especially hard.

Another sign of consumers feeling economic stress is the latest report on retail sales in December 2025, which came in with no change. While this report is adjusted for seasonal factors, such as seasonal holiday shopping, it is not adjusted for inflation. So flat retail sales would mean fewer, but higher priced items are being sold.

Last but not least, the corporate-owned mainstream media focused on the January 2026 jobs numbers that came out in the same report. The report was better than expected, with 130,000 net new jobs, more than twice what economists expected, and the unemployment rate dropped a bit to 4.3%. However these monthly reports are revised three times, and the changes in the January numbers have been especially large. For example, the first report on January 2025 job creation that came out in February 2025 was 143,000 net new jobs created. But the final numbers just out show a loss of 48,000 jobs, or 183,000 fewer jobs than first reported. If a similar revision were to happen in February of 2027, it would wipe out all the new jobs in January 2026 and push the report to a net loss of about 50,000.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs #Trump

On October 15, a White House memo boasted a $13 billion investment in five Midwestern plants by automaker Stellantis. It also announced projects by Whirlpool, General Electric and others. Thanks to tariffs, Trump tells us, the prodigal sons of industry have returned.

But how does the scoreboard really add up for reindustrialization?

Not quite as advertised. These aren’t new factories; they’re old ones being retooled. Tariffs shoot manufacturers in the foot, since they drive up prices for supplies. Investing in new technologies takes skilled workers. This is a hard sell when ICE just deported over 300 Korean technicians from a Georgia car factory. Auto corporations, hearts full of liberal compassion, fear that “first they came for Hyundai.”

That said, there is a real attempt by both parties to “bring manufacturing back.” The truth is, this isn’t the same thing as creating jobs.

Putting America back to work?

The latest factories will be more automated than those of the past. For example, the Wall Street Journal reports that Hyundai’s latest auto plant in Georgia has a robot-to-human ratio of 2 to 1, compared to the 7 to 1 industry average. A study by the Society for Human Resource Management found that 23% of employment in direct production is mostly automated. While Trump promised booms in employment, the Bureau of Labor Statistics reported a loss of 12,000 manufacturing jobs in August alone. The Bureau predicts continued stagnation through 2034.

This trend is not new. In 1980, it took over ten hours’ labor to produce a ton of steel, and by 2018 this dropped to 90 minutes. Production levels have stayed constant, but the number of manufacturing workers has declined since 1979.

Automation not only reduces the number of jobs, it demands greater levels of education for the jobs it opens. Programming, overseeing, operating and repairing equipment often requires either college-level education or specialized training. Workers late in their careers, rural workers, or otherwise poor job-seekers are going to have a hard time accessing these skills.

Economist Robert Lawrence summarizes, “the sector should not be promoted as a vehicle of inclusive growth and employment for low-skilled workers.”

Falling rate of profit

Automation has sharpened the tendency for the rate of profit to fall. In order to undercut each other, manufacturers race to adopt the latest technologies. However, by doing so, they’re permanently raising the bar for machinery used throughout the industry (i.e. think the robot-to-human ratio discussed earlier). That means that a greater portion of their costs are constant. It’s impossible to squeeze an extra dollar out of a machine like it’s possible to exploit a human worker. The overall rates of profit can go down.

This can be seen in General Motors’ average annual operating margin, which went from 8.7% in the 1960s to negative numbers in the 2000s. Since 2008, car companies have been able to buck this trend to some extent. But this is the exception that confirms the rule: they needed help from Obama’s bailout and Biden’s subsidies. They’ve also slashed wages and relocated U.S. plants to union-busting states in the South. The 2023 strikers in the United Auto Workers know this all too well. But even in the past few years, automakers have seen their profit margins dip once again.

The race to the bottom is self-defeating. Low rates of profit make it harder to attract the finances needed to stay on the cutting edge.

Julius Krein, head of the New American Industrial Alliance, criticizes fellow capitalists for the big green dollar signs in their eyes. “During the last several decades, Americans found a way to financially engineer seemingly everything except for investments in critical techno-industrial capabilities,” he writes.

“Warning indicators are flashing red”

Because of this stagnation, more of the U.S. ruling class is ready for a heavier government hand. The prize at stake isn’t the average worker, it’s the average bottom line.

Oren Kass, chief economist at a conservative think tank, writes in Foreign Affairs: “Across the American economic dashboard, warning indicators are flashing red. The globalization and financialization of the past several decades have slowed investment, innovation, and growth. Industrial output and productivity have declined, and the United States has lost its leadership position in vital technologies – including in aerospace, energy, and semiconductors.”

It’s not just that lights are blinking on the dash, it’s also that capitalists won’t pay for a new car. “Simply put, the activities that generate the highest returns on capital are not the ones that have anything to do with building productive and innovative enterprises.”

Their solution is for the government to support gains that capital can’t achieve in the marketplace. Tariffs are one step of many. These are starting to compel manufacturers to invest in the U.S., which in turn forces companies to automate to avoid paying more workers. Industry representatives are also begging for subsidies and state-funded retraining programs. “Lead us,” the blind ask of the blind.

Salvaging jobs, or empire?

Attempts at reindustrialization have nothing to do with jobs and more to do with recovering profits. But above all else, it’s U.S. imperialism’s scramble against foreign competition.

Within U.S. borders, European and Asian automakers assemble more vehicles than the Detroit Three (Ford, General Motors, and Chrysler/Stellantis). Julius Krein complains that the U.S. is in the “middle of the pack” for overall automation levels.

China is leading the pack. The ruling class has come to admit the country’s economic superiority. “China has achieved advanced electrification with astonishing speed in part because of government support,” a recent Foreign Affairs article noted. “If the United States wants to achieve results like China, it will have to build more like China by replicating certain aspects of how Beijing organizes and mobilizes its production economy.”

In the same pages, former US Deputy National Security Adviser Nadia Schadlow recommends: “A commitment to reindustrialization would undercut China’s efforts to weaken the United States.”

The motivation behind attempted reindustrialization is clear – the U.S. monopoly capitalists face an existential threat from socialist China. And they can’t foot the bill to pull ahead. They are right to be worried. Modern manufacturing is central for everything from cars to drones to artificial intelligence. As much as Trump wants to sell the idea of some untapped potential for jobs, he won’t revive the factories of the 1950s. He’s desperate to shore up imperialism by milking what he can out of a declining industrial base.

#Opinion #Commentary #Labor #Automation #Trump #Jobs #Unemployment #CapitalismAndEconomy

The official unemployment rate in August, or “U-3”, ticked up to 4.3%, from 4.2% in July. This was the highest rate since 2021. While the unemployment rate for white Americans did not change, the unemployment rate for African Americans and Latinos both went up by 0.3%. The unemployment rate for Black Americans is now 7.5%, more than twice the rate for white Americans, which was 3.7%. Since African Americans have long been “last hired, first fired,” this increase points to higher overall unemployment in the near future.

The number of workers who are working part-time because they cannot find full time work because of the weak economy also rose, bringing the total unemployed and underemployed rate to 8.1%, again, the highest since 2021.

The positive number of net new jobs was held up by gains in health care and leisure and hospitality industries, which added a total of 75,000 net new jobs. But this was offset by losses of more than 50,000 jobs total in manufacturing, wholesale trade, temporary help services, the government, and other industries.

Manufacturing jobs fell by a net of 19,000, making this the fourth month in a row that manufacturing industries lost jobs. One example of this is farm equipment manufacturer John Deere, which announced hundreds more job cuts in August and has plans for more. U.S. farmers have been squeezed between the loss of export markets, especially China as a result of Trump trade wars, and the rising cost of farm equipment, and have cut back on new machinery orders.

Other measures for the health of the job market have also been in decline. On Thursday, the report on unemployment insurance claims showed another increase, this one of 8000 for the week ending August 30. The Job Opening and Labor Turnover Survey or JOLTS showed another drop in the number of job openings, falling below the number of unemployed. This is only the third time this has happened in more than four years.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs

The disappointment was caused by the report that the economy only created 73,000 net new jobs in July. This was a much lower number than expected by economists and meant that the economy created the fewest jobs over the past year since March of 2021, when the economy was just starting to shake off a recession. There was also disappointment that the unemployment rate for African Americans and for Asian Americans increased by 0.4%, or four times as much as the unemployment rate for white Americans.

Many were also shocked by the very large downward revision in new job creation in May and June. While the original reports said that 144,000 and 147,000 net new jobs were created, the revisions brought the numbers down to only 19,000 in May and 14,000 in June. This raises the possibility a similar revision would that the economy actually lost jobs in July, which is a traditional way to mark the start of a recession in the United States.

Last but not least, President Trump was angry about the report. He claimed that he would bring prices down, but in fact they have been rising at a faster rate. Trump also said that his tax cuts and tariffs would grow manufacturing, but now the economy has shed manufacturing jobs for three months in a row. So, he shot the messenger by firing the head of the Bureau of Labor Statistics, which prepares the monthly report. This will cause even more doubt about whether the statistics in the future reflect the best estimate of reality or what best serves the interests of President Trump.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs #Unemployment #Trump

The small drop in the unemployment rate could be accounted for by the drop in the “Labor Force Participation Rate” by the same one-tenth of one percent from 62.4% in May to 63.2% in June. What this means is many people without jobs gave up looking in June, which lowers both the unemployment rate as people have to be out of work and looking for work to be counted as unemployed.

In terms of the jobs report, the increase in new jobs in the private sector fell by almost half from 137,000 in May to only 74,000 in June. Manufacturing jobs, a proclaimed focus of the Trump administration, continued to lose jobs, declining by 7000, the same loss as in May. But the total number of jobs was boosted by a large increase in government jobs, from a tiny increase of 7000 in May to ten times as much, or 73,000 in June.

The federal government continued to shed jobs, down 7000 in June. But state and local governments were reported to have added a total of 63,500 education jobs in June. Now as everyone knows, schools tend to shed jobs in June as the school year ends. This is usually accounted for by “seasonal adjustment” for things like summers, holiday retail hiring, etc. So, it is much more likely that there was some kind of seasonal adjustment problem rather than a rash of hiring at the end of the school year or beginning of summer.

Last but not least, while the average unemployment rate fell by one-tenth of one percent to 4.1%, the unemployment rate for African Americans rose by eight tenths of a percent, to 6.8%. This increase in the unemployment rate would have even been a bit larger for African Americans if their Labor Force Participation Rate had not also fallen, meaning more people who were out of work did not look for work and thus were not counted as unemployed.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs #Unemployment

The monthly jobs report is based on a survey of businesses, while the revision is based on more complete state records of unemployment taxes which businesses pay for each of their workers. The latest monthly jobs reports have weakened, with the latest report for July showed only 114,000 new jobs. The revision shows that the labor market was much weaker for over a year.

This revision was not surprising, since reports from a survey of households showed unemployment rising and far fewer people becoming employed. Some economists questioned the revision downward, pointing the growing numbers of undocumented immigrants who are ineligible for state unemployment. However, almost half of the downward revision was in the white-collar professional and business services, which has very few undocumented workers.

This revision should be finalized in February of 2025, with monthly adjustments of the payroll jobs number. The revision also puts the payroll jobs report, which economists use to determine when a recession starts, within striking distance of a negative, or net job loss, report. This means that a recession is much more possible in the near future.

#SanJoseCA #CA #CapitalismAndEconomy #Jobs #Unemployment

These headlines were based on a survey of employers, both private and government, that showed 353,000 net new jobs created in January, almost twice what economists were expecting. But there is also an unemployment report based on a survey of households. This report was much weaker, showing 31,000 fewer people with jobs. More people were working part time for economic reasons – that is, they were unable to find full-time work.

This divergence between the employers and household survey may help to explain why so many people report feeling that the economy is doing poorly despite a low unemployment rate of only 3.7%.

Even more unusual in what is considered a strong economy is that the total weekly hours worked in the private sector fell 0.3% in January and was only up less than 0.2% as compared to a year earlier. Typically, strong job gains, especially in a low unemployment environment, would go hand in hand with many workers having more hours and overtime. It seems that in January the number of new jobs reported, combined with the average hours falling, meant that many part-time jobs were created. More workers are reporting that they work multiple jobs, as one full-time job is not enough to get by. Others have to work multiple part-time jobs.

Another sign of distress is the sharp rise in credit card debt – up 10% in 2023, with the average (unpaid) balance hitting a record $6360 per consumer. More households are carrying debt from month to month: almost half, or 49%, a big jump from 39% in 2021 . Delinquency rates, the percentage of credit card borrowers who are late on their payment rose by more than 50% in 2023. Those more than 90 days late reached the highest level since 2009 in the wake of the financial crisis and double-digit unemployment. With the sharpest rise among those 30-39 years old, the resumption of student loan payments is a likely suspect contributing to more credit card debt and more late payments.

#SanJoseCA #CapitalismAndEconomy #Jobs #Unemployment

The Gotion Battery Plant being built near Big Rapids, Michigan will reportedly create 2300 permanent jobs and hundreds of temporary construction jobs. The Chinese-owned firm is investing $2.4 billion into an electric vehicle parts factory.

When the Gotion plant started to move forward with breaking ground in June, the Michigan legislature was voting to give the plant a $175 million tax abatement. Then far-right activists and Republican politicians launched a media campaign making outrageous claims. The anti-communist hysteria temporarily drowned out the fact that thousands of good paying auto industry jobs are returning to Michigan.

In response, Sam Skene created the Ferris State Students and Big Rapids Coalition for Jobs. Skene reached out to Students for a Democratic Society (SDS) at Oakland Community College in the hope of creating an information and flyering campaign. Students explained to local residents about the need for new jobs, livable wages, community investment from Gotion, and the new training program Gotion will create at Ferris State.

On June 17, students handed out 500 flyers, going door to door, reaching a significant section of Big Rapids. Big Rapids is a small city in sharp decline. It lost nearly half its population since the 1980s deindustrialization era began in the Midwest. Now Ferris State University, the main anchor of the local economy, is struggling to keep its enrollments up. The new EV factory will stabilize the struggling local economy.

Many local businesses and residents gladly took flyers. Student canvassers found people willing for open and insightful conversations. One local business owner said, “There’s so much racist hatred going around for no reason, we need jobs, not attacks on investments in our community.”

A local arborist, Daniel Johns, said, “Let them set up shop. We need jobs. It doesn't matter what country the boss is from.”

Student activist Sam Skene said, “These aggressive acts purport the racist and outdated idea that it is inherently bad to be Asian and successful in America. With the assistance of the SDS we were able to spread awareness of this issue to hundreds of members of our local community.”

“As a Flint native I especially understand the problem communities face when there is job scarcity. I find it crucial that SDS participates in any campaign that aims to inform and destroy xenophobic ideology,” said Terience Perry, president of Oakland Community College SDS.

#GrandRapidsMI #jobs

The official unemployment dropped 0.3% to 3.9%. Normally this would be getting close to full employment, which has only happened five times in the last 100 years. But since the start of 2020, almost 4 million Americans no longer counted as part of the labor force as they are neither working nor looking for work. If these people were looking for work, the unemployment rate would be about 5.4%.

Workers’ earnings have also been falling behind rising prices. Through November of 2021, average weekly earnings (including both rising wages and more hours of work) were up 4.7% from a year earlier. But over the same time, inflation as measured by the consumer price index went up 6.8%. This means that the purchasing power of an average worker fell about 2%, despite higher money-wages.

Inequality also increased as the unemployment rate for whites fell 0.5% to 3.2%. But the unemployment rate for African Americans rose 0.6%, to 7.1%. This increased the gap between white and Black Americans in terms of unemployment, to more than 2:1 ratio. For the last 50 years the unemployment rate for African Americans has been twice that of white Americans, or more, showing the persistence of the national oppression of Blacks in the labor market. Since the recession in 2020, the gap has actually grown larger, showing that the rising tide of jobs has not lifted all boats.

#SanJoseCA #PeoplesStruggles #jobs

San José, CA – On Oct. 2, the Department of Labor reported that the U.S. economy created only 142,000 net new jobs in September. This was in much less than the 200,000-plus jobs that mainstream economists expected. Even worse, the Labor Department reported that their revised estimates for July and August turned out to be 59,000 fewer new jobs than originally reported.

While the official unemployment rate stayed the same from August to September, at 5.1%, this was only because more than 300,000 people who were not working gave up looking for work. This brought the Labor Force Participation Rate down to 62.4%, a level last seen in 1977, when women were beginning to enter the labor force in large numbers.

Other signs of weakness in the labor market were small drops in the average number of hours worked and the average hourly earnings. Taken all together, these changes signaled more weakness in the U.S. economy, which is being slowed down by economic problems in other countries and the big fall in oil prices. Mining (which includes the oil sector) and manufacturing (which ships goods to other countries) both saw a decline in jobs in September.

#SanJoseCA #jobs #economy

Those one-hundred sat down on a large tarp on the bridge, with the remaining protesters surrounding them, for about three hours. The protests across the country were intended to highlight the fight for jobs, arguing that people could be put to work fixing our nation’s crumbling bridges.

The rally at Carver Park only lasted for about 15 minutes, but included speeches from several community members, including local politician Ian Biddle, who said of the people on Wall Street, “They don’t care about us, they don’t care about black people, or Hispanic people, or poor people. . . we will not be divided between black and white.” Then protesters marched to the bridge, chanting “We are the 99%!”

When they arrived at the bridge, another speaker addressed the crowd, saying “We won’t tolerate one more cut or one more corporate giveaway.” Protesters then surrounded the taped-off civil disobedience zone, forming a barrier between those performing civil disobedience and the police. Organizers of the march set up tents and distributed water and hand warmers.

As time went on, the police constructed a one-way barrier through which people could leave, but could not re-enter. Arrest seemed imminent as the police surrounded the occupied bridge. Protesters began new chants, such as “We are unstoppable, another world is possible,” and “Walker, let’s face it, your budget cuts are racist,” in reference to Wisconsin’s right-wing governor Scott Walker.

Chief Ed Flynn of the Milwaukee Police Department announced to the media that their blockade would stay up. No one could bring in food, but that the occupiers would be allowed to stay the night on the bridge if they wished. Occupiers held a meeting and decided to march to the MICAH building nearby. The MICAH building is the headquarters of a local inner-city faith activist group. Despite warnings from the police, protesters took the streets and marched all the way to the building, where they were greeted with applause.

University of Wisconsin Student and Students for a Democratic Society (SDS) member Eddie Chapman said of the action, “It was a success, we won...this was the most inspiring and radical action I’ve ever been a part of.” Chapman was one of sixteen arrested on the March 4, 2010 National Day of Action for Education Rights.

#Milwaukee #MilwaukeeWI #CapitalismAndEconomy #PoorPeoplesMovements #jobs #OccupyMilwaukee #OccupyWallStreet #bridges #CarverPark #OWS

Even worse, the average number of hours worked decreased by one-tenth of an hour. While this is a small number, multiplied by millions of workers, it means of loss of wages equivalent to losing some 300,000 jobs.

The unemployment rate stayed the same in August as compared to July; at 9.1%. One reason for this was that there was a large increase in the numbers of part-time workers who could not find full-time work because of the bad economy. The number of part-time workers has almost doubled since the start of the recession, from 4.5 million in December 2007 to 8.7 million in August. A broader measure of unemployment, that includes these part-time workers as well as discouraged workers who have given up looking for work, actually ticked up from 16.1% in July to 16.2% in August.

There was also a big increase in the unemployment rate for African Americans of almost a whole percentage point. The African American unemployment now stands at 16.7%, more than twice as high as the rate for non-Hispanic whites, which is 7.2%.

The official unemployment rate only counts those who are out of work and looking. Over the last four years the broadest measure of employment, the percentage of adults that are working, dropped from 62.7% to 58.2% in August. This measure usually falls during a recession, but has continued to fall since the official end of the recession two years ago.

The job market is caught in a vise between businesses that are not hiring and government spending cuts that are leading to job losses. Over the last two years businesses have cranked up production to where it is almost back to pre-recession levels. They have done this will seven million fewer workers. With their labor costs down, profits are way up and corporations are sitting more than a trillion dollars in cash that they are not spending.

But businesses are not going to hire more unless there is a pickup in spending. Consumers are not spending more because of high unemployment that limits income. The most widespread type of household wealth, housing, has been hit hard by the fall in home prices because of rising forced sales. With the number of home buyers who are behind on the payments rising in the April to June period, it is likely that home prices still have a way to fall with more forced sales in the future.

Exports of goods and services to other countries had been a bright spot in the economy, as the falling value of the U.S. dollar makes U.S. exports cheaper. But the economic slowdown and growing financial crisis in Europe have cut into exports, with exports falling in June, the latest month for which data is available. Job in manufacturing, an industry that has a large export market, fell for the first time in almost a year in August, with a loss of 3,000 jobs.

At the same time governments are cutting jobs. There have been almost 300,000 government jobs lost so far this year. State and local governments, especially schools, have been hardest hit by the bust in the housing market, which has cut into property tax revenues. With the end of the federal stimulus moneys going to state and local governments, they have had to cut even more. The recent ‘deficit reduction’ agreement promises to cut federal spending and jobs even more.

Both the Federal Reserve and the Obama administration are likely to try to stimulate the economy. But the most likely result is more of the easy money and piecemeal federal programs which haven’t been enough to get the economy back on track. More dramatic measures, such as a federal jobs program and allowing home buyers to reduce the mortgages through bankruptcy are needed to create more jobs, reduce foreclosures and create the income and spending needed to get the economy growing again.

#SanJoséCA #recession #jobs #doubleDipRecession

San José, CA – On Friday, July 2, the U.S. Department of Labor reported that 125,000 jobs were lost in June. While the official unemployment rate fell from 9.7% in May to 9.5% in June, this was due to the 650,000 people that gave up looking for work and were no longer counted as unemployed. These signs of weakness in the labor market followed reports that housing and car sales were also weak in June. Altogether these reports increase the danger that the economy could slide back into a “double-dip” recession.

The large job loss in June was mainly due to the Census Bureau cutting 225,000 temporary jobs. This was partially offset by private businesses creating 83,000 new jobs. This is a very weak rebound compared with past recessions. Following the deep 1981-1982 recession, businesses created an average of more than 200,000 new jobs per month for the first six months of 1983. It took only ten months for the jobs lost during the recession to come back once businesses started hiring again. In contrast, businesses have added less than 100,000 new jobs each month this year. At this rate, with almost eight million jobs lost because of the recession, it will take eight years to gain back the lost jobs.

The unemployment gap between whites on one hand, and African Americans and Latinos on the the other, widened in June as compared to May. The official unemployment rate for African Americans was 6.8% higher than whites, at 15.4%, and the rate for Latinos was 3.8% higher, at 12.4%.

While the official unemployment rate fell from 9.7% in May to 9.5% in June because fewer people were looking for work, if these people were counted as unemployed, the unemployment rate would have actually increased to 9.9%. The drop in what economists call the “labor force participation rate” meant that last month there were about three million fewer people in the labor force than if the labor force participation rate were the same as the expansion years of 2002-2007. The number of jobless workers who said that they wanted to work but didn’t look in June (marginally attached and discouraged workers) rose by more than 10% from the month before. A broader measure of unemployed, jobless who stopped looking for work, and part-time workers who can’t find full time work stood at 16.5% in June, or one of every six workers.

Other signs of a weak labor market were that weekly hours of work fell, showing that employers were cutting back on the work week. The typical unemployed worker was out of work two weeks longer in June (25.5 weeks) than in May (23.2 weeks). In addition, the Labor Department reported on July 1 that the four week average of new claims for state unemployment insurance benefits rose to 466,500, the highest level since March.

Economic weakness was not just in the jobs report. The National Association of Realtors reported on July 1 that pending sales of existing homes fell by 30% in May, following the end of the Federal home buyers tax credit. This indicates that home sales would be much weaker in June. The June jobs report also reflected the weak housing market as construction jobs fell by 22,000. Car sales were also off in June. Total car sales of both U.S. and foreign-owned car companies fell 4.5% to 11.2 million, from 11.6 million (at an annual rate) in May.

Republicans are leading the charge to end programs to counteract the effects of the recession. They have argued that unemployment insurance keeps people from taking jobs. But last month when Republicans in the Senate blocked funding and cut more than a million people from the Federal Extended Benefits (EB) and Emergency Unemployment Compensation (EUC) programs, more people stopped looking for work. Republicans have also blocked funding for the COBRA program to help the unemployed keep their medical insurance, and funding for states to pay for medical care for the poor. This will lead to even more home foreclosures, more people without health insurance, and greater cuts in state spending.

State and local governments and schools cut almost 10,000 jobs in June, reflecting their on-going budget woes. Over the last year, state and local governments and schools have cut almost 200,000 jobs. In contrast, between 2002 and 2007, state and local governments added over 150,000 jobs a year. Job cuts are likely to increase when Federal stimulus moneys designed to help state and local governments run out at the end of the year. Not only are jobs being lost, but state and local government workers and teachers are facing cuts in pay, benefits, and hours worked, leading to cuts in government services and education when they are needed the most.

A growing worry is that this wave of belt-tightening at the local, state, and Federal governments, along with similar efforts in Europe and Japan, will throw the economy back into a decline, or what is known as a “double-dip” recession. This happened during the Great Depression, when efforts to cut the Federal budget deficit led to a sharp recession in 1937-1938, causing the unemployment rate to rise from 14.3% to 19%.

#SanJoséCA #EconomicCrisis #Unemployment #recession #jobs