These dismal reports on home sales capped a week of bad economic news. On Aug. 19, the Department of Labor reported that new claims for unemployment insurance rose for a fourth week in a row, to a nine-month high of 500,000. The total number of people getting state or federal unemployment insurance topped 10 million. This level of new claims for unemployment insurance points to job losses in the private sector for the first time this year, on top of job losses at the local, state and federal levels of government due to budget cuts and the end of temporary census jobs.

With the housing and job markets in retreat, the threat of another downturn in the overall economy, or what economists call a ‘double-dip,’ looks more and more likely. While most economists still say that they don’t expect a double-dip, the fact is that most U.S. recessions show a pattern of an initial fall in the economy, a period of recovery and then another leg down to a new low.

More ominously, a double-dip took place during the Great Depression of the 1930s, where the economic expansion that began in 1933 was followed by another severe recession in 1937-1938, when the government stimulus was cut back. With the stimulus of the 2009 American Recovery ad Reinvestment Act largely spent and Republicans trying to block more federal stimulus at every turn, there is the growing possibility that a new downturn will worsen.

Last week the Federal Reserve, which bought $1.7 trillion dollars of government and mortgage bonds to save the financial system, voted to keep buying bonds to replace those bonds that are paid back. The Fed still has the option of buying even more bonds, pumping even more money into the economy. The problem is that most of this money created by the Fed is sitting in banks, which have more than a trillion dollars of “excess reserves,” i.e. money that they could lend out, but aren’t.

U.S. corporations are also sitting on record amounts of cash from their swollen profits made by cutting jobs and squeezing more work out of their remaining employees. At the end of March, U.S. non-financial corporations had almost $2.5 trillion in their checking and savings accounts and money market funds, a record high.

With another economic downturn looming and an even more pro-business, pro-rich government in the cards for next year, working people, trade unions and grassroots community and student groups will have their work cut out for them in the fight to defend our livelihood, homes, schools and communities.

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But the job gain in March was largely driven by more temporary and part-time jobs. In the monthly survey of business, more than half the new jobs were temporary jobs, including 48,000 temporary Census jobs. In a separate unemployment report based on a survey of households, the Labor Department reported that 264,000 more people were working in March, but that there were also 263,000 more people working part-time because they couldn’t find full time jobs. This surge in part-time workers pushed a broader measure of underemployment (that includes these part-time workers as well as those who gave up looking) another one-tenth of one percent to 16.9% in March. The official unemployment rate was steady at 9.7%, the same as in February. It is not clear when or if businesses will start to hire more permanent, full-time workers.

The unemployment report also showed a continuing surge in long-term unemployment. The average length of time an unemployed worker had been without a job rose to more than 31 weeks, the longest since this statistic began to be collected in 1948. The number of people out of work for more than six months rose by 414,000, to reach 44% of the total number unemployed. In a possible sign that the growing number of long-term unemployed were putting downward pressure on wages, the average hourly wage dropped in March as compared to February.

While the unemployment rate for whites remained the same as in February at 8.8%, the unemployment rate for Africans increased from 15.8% in February to 16.5% in March. The unemployment rate for Latinos also rose, but by a smaller margin, to 12.6% in March.

One sign of future job losses was the decline in workers in state and local government jobs. Many state and local governments are facing a double whammy of continuing budget deficits and the loss of federal government economic stimulus moneys later this year, which could lead to mounting job losses. The financial sector also continued to cut jobs (21,000 in March) and they face a potential slowdown as the Federal Reserve Banks continues to cut back on the large number of special loan programs designed to help the financial sector.

Despite the month of job gains, the labor market has a long way to go to make up for the more than 8 million jobs lost in the recession. The rising number of long-term unemployed, together with the growing number of people who have given up looking for work, show the continued need for a Federal Government Jobs Program and more aid to state and local governments. With the 75th anniversary of the start of the Depression era Works Progress Administration (WPA, later renamed the Work Projects Administration) on April 8, 1935, there is no better time for a new federal jobs program.

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