Jobless Rate Climbs to 5.7% as 51,000 Jobs Lost in JulyJobless Rate Climbs to 5.7% as 51,000 Jobs Lost in July
By MICHAEL M. GRYNBAUM
The nation’s employers eliminated 51,000 jobs in July, the seventh consecutive contraction in the labor market, as the unemployment rate reached a four-year high, signs that the pressure on business owners and consumers is likely to continue.
Still, the decline in the job market has softened since the spring. The number of layoffs was less than the 75,000 that economists had expected, and the government said that businesses cut fewer jobs in June and May than previously reported.
Still, the nation’s unemployment rate has steadily moved higher. In July, it rose to 5.7 percent from 5.5 percent in June, its highest level since March 2004.
The steepest losses came in the manufacturing, construction and trade industries. Administrative and retail workers also slipped.
Stocks on Wall Street opened flat, as investors weighed the better-than-expected jobs figures against a $15.5 billion quarterly loss at General Motors.
Businesses have been cutting workers since the start of the year, in an effort to make ends meet amid an economic slowdown. While export sales have risen, many American customers have ratcheted back their spending to cope with expensive fuel and food and the ailing housing market.
The payroll report is the second major snapshot of the economy in 24 hours: on Thursday, the government reported that the economy grew 1.9 percent from April to June, less than economists had hoped. The disappointing number came despite the injection of billions of dollars into the economy from the government’s tax rebate program. Some analysts took that as an indication that the economy would continue to struggle until the end of the year.
So far, though, the nation has avoided the traditional definition of a recession, two consecutive quarters of contraction in gross domestic product. But economists have pointed to the steady erosion of the labor market as a sign that many Americans are facing significant financial problems, making the recession debate more a matter of semantics.
“To workers, it’s a recession,” John Lonski, the chief economist at Moody’s Investor Service, said. “And really what matters in the end is what’s taking place in payrolls and the unemployment rate, and they’re both moving in the direction of a labor market recession. How can you argue with that?”
Wage growth has stagnated for months, falling behind the rate of inflation. That means workers are effectively making less than they were at the beginning of the year. In July, the average weekly salary of non-managerial workers — who make up about 80 percent of the nation’s payrolls — was 2.8 percent higher than a year ago. But inflation is running at 5 percent for the 12 months through July, according to the benchmark Consumer Price Index.
Average hourly earnings rose to $18.06 an hour, up 3.4 percent in the 12 months through July.
Some companies have avoided job cuts by reducing their workers’ hours, which has further cut into household budgets.
Source: http://www.nytimes.com/2008/08/02/business/02econ.html?_r=2&hp&oref=slogin&oref=slogin Back | Print version | SEND ARTICLE VIA E-MAIL | 
