Hiring, jobless figures inch up
An upbeat employment report showed employers added 163,000 private-sector jobs in July, indicating the economy is climbing back, but in low gear, experts said on Friday.
But the nation's unemployment rate, derived from a government survey of households, edged up to 8.3 percent from 8.2 percent in June. A year ago, the unemployment rate stood at 9.3 percent.
“This was good, positive news in that respect,” said Heidi Shierholz, an economist with the Economic Policy Institute in Washington, said of the Bureau of Labor Statistics' report.
After disappointing job gains from April through June, the increase in private-sector hiring in July was the highest since February. It brought the monthly average of newly created jobs to 151,000 so far this year. That non-farm job count is derived from a separate survey of employers.
But the number of job gains was not much more than it would take just to absorb the 100,000 or more monthly increase in the population, Shierholz said.
“If we keep getting an average growth rate of 151,000, it will take us 10 years to get back to full employment,” she said. Economists generally agree the economy is at “full employment” at about 5 percent unemployment. “We need more robust job growth to get us out of this in a reasonable time frame,” Shierholz said.
The latest job numbers provided fodder both for President Obama, who highlighted improved hiring in the private sector, and Republican challenger Mitt Romney, who pointed at higher unemployment.
Investors focused on the positive as the Dow Jones industrials surged more than 220 points.
No modern president has run for re-election when unemployment was so high. President Carter was bounced from office in November 1980 when unemployment was 7.5 percent.
In remarks at the White House, Obama said the private sector added 4.5 million jobs in the past 29 months.
But he acknowledged there still are too many people out of work. “We've got more work to do on their behalf,” he said.
Former Massachusetts Gov. Romney focused on the increase in the unemployment rate, as did other Republicans. “Middle-class Americans deserve better, and I believe America can do better,” Romney said in a statement.
The “labor force participation rate” — an all-in view that measures the percentage of working-age people with a job or who are actively looking for one — slipped to 63.7 percent last month from 63.8 percent in May.
The July ratio tied January's for the lowest rate since the early 1980s, when America was in its last deep economic downturn before the 2007-2009 recession.
“If we had really strong, healthy growth, we'd see that participation rate go up,” said Mark Price, labor economist for Keystone Research Center, Harrisburg.
There are roughly 3.5 unemployed workers for each job opening in the country, which shows steady improvement from the depths of the recent recession, Shierholz said.
The ratio was 6.7 unemployed workers per open job in July 2009, when the recession technically ended, the worst ratio since such tracking began in 2000.
“So 3.5 is a dramatic improvement, but we still have a long way to go,” Shierholz said. “In a healthy labor market, it should be just one unemployed worker for each job opening.”
Almost 12.8 million people were unemployed in July, said the bureau report. That was about the same level as in June but down from about 13.9 million in July 2011.
Of that nearly 12.8 million, the number of long-term unemployed — those out of work for 27 weeks or longer — fell by 185,000 to less than 5.2 million last month from almost 5.4 million in June.
“So, yes, things are improving, but not very rapidly,” Price said.
Private-sector jobs swelled by 172,000, according to the survey of businesses. But the government sector shed about 9,000 jobs, pulling July's overall increase down to 163,000.
Some economists maintain that the size of the private sector is exaggerated because of public subsidies, particularly in the health care sector.
About 38,000 of the reported 172,000 jobs generated in July were in subsidized sectors, which would change the “real” private sector job increase to 134,000, said economist Alan Tonelson.
Subsidized sector jobs “say little about the strength of businesses and industries that must rely almost entirely on private investments and markets,” said a statement from Tonelson, who is a research fellow at the U.S. Business & Industry Council in Washington.
Employment in professional and business services, manufacturing, retail and wholesale trades and other sectors increased in July. But construction lost about 1,000 jobs.
“Other data — such as housing starts and prices — suggest housing may be slowly, slowly recovering,” Price said. “But construction jobs are slow to follow that.”
Thomas Olson is a staff writer for Trib Total Media. He can be reached a 412-320-7854 or at firstname.lastname@example.org. The Associated Press contributed to this report.