Tuesday, August 2, 2011

The U.S. Employment Situation - June 2011

«• August 24, 2009 •»

«• - United States — The economy's most vexing problem, unemployment, is showing the first signs of easing. The U.S. Government said the nation's unemployment rate unexpectedly fell in July for the first time in 15 months and that employers cut fewer jobs. The government said employers shed 247,000 jobs in July, the fewest in a year. Economists had expected 320,000 lost jobs. The unemployment rate dropped to 9.4 percent from 9.5 percent in June, rather than rising to 9.6 percent as forecast.•»

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117,000 Jobs added in July 2011

August 5, 2011

WASHINGTON, D.C. -- Better. The job market beat expectations, and the stock market managed a modest gain - not great, but good enough after a turbulent week. The nation added 117,000 jobs in July, the government said Friday - far from what happens in a healthy economy, and only good for a reduction of one notch in the unemployment rate, to 9.1 percent. But the jobs number beat the forecast of economists, who were expecting no more than 90,000. And it was an overwhelming relief for investors, who just lived through two of the most brutal weeks in Wall Street history.

"Nothing to pop Champagne corks over," said Diane Swonk, chief economist at Mesirow Financial, "but a much-needed shot in the arm for confidence at a time when we have so little."

But when they come back on Monday, investors will have to absorb another body blow:

Late Friday, ratings agency Standard & Poor's downgraded the United States' debt for the first time, saying the government's debt-reduction plans fall short. The downgrade could lead to higher interest rates and further hamper the economic recovery.

The Dow Jones industrial average finished Friday with a gain of 60.93 points and closed at 11,444.61. It made up only a small fraction of the losses from Thursday, when the Dow dropped 512, its worst since the financial crisis of 2008. Friday was not exactly quiet for the market, either.

At the start of trading, investors were thrilled with the unemployment report, and the Dow rose 171. Ten minutes later, the gains were gone. Investors focused on Europe, which is struggling to keep Italy and Spain from being consumed by a growing financial crisis, and the Dow fell 243. "The fear was that they had no plan to deal with the situation," said Randy Warren, chief investment officer at Warren Financial Service. Later in the day, Italy promised to work toward a constitutional amendment to balance its budget. It was trying to calm investors around the world, who are worried that financial problems are spreading in Europe.

The Dow's gain was only its second in the past 11 trading sessions. The average has lost about 10 percent of its value in that time. The Standard & Poor's 500, a broader measure of the market, finished just under 1,200, down a fraction of a point. It was the Dow's worst week since March 2009, down 5.8 percent. The S&P, down 7.2 percent, and the Nasdaq composite index, down 8.1 percent, had their worst weeks since November of that year.

The gain of 117,000 jobs for the U.S. economy looked even better considering that 37,000 public jobs disappeared during the month. Most of those were from a temporary government shutdown in Minnesota. Subtracting those government layoffs, the private sector added 154,000 jobs for the month. And the economy added 56,000 more jobs than first thought in May and June. Manufacturing companies added 24,000 jobs, which suggests that the supply disruptions caused by the Japan earthquake may be almost over. Makers of cars and other products found themselves short of parts after the disaster.

The July job gains ranged broadly across industries. Retailers, factories and health care firms were among the many sectors that added workers.

Workers were paid more, too. Average hourly wages showed the biggest monthly gain since 2008. More jobs and better pay means people have more cash to spend, helping the economy grow. All told, the figures suggested a slower-growing economy - but not one on the verge of a new recession, as some had feared.

Some economists were impressed that the economy managed to add more than 100,000 jobs in a month when companies feared the government might default on its debt. Congress and the White House struck a deal with hours to spare. Other economists noted that corporations remain highly profitable, stocked with cash, and can hire when needed. They're waiting for customer demand to come back in force.

The economy is still too weak to produce the 250,000 new jobs a month that it takes to bring down the unemployment rate quickly. The rate has been above 9 percent in every month except two since the Great Recession ended in June 2009. Other recent data show the economy struggling. In June, consumers cut back on spending for the first time in 20 months. Manufacturers are barely increasing their output. The economy barely grew in the first half of the year. The weakness has raised pressure on the Federal Reserve to take further steps to support growth. After they meet Tuesday, Fed policymakers could make clear that short-term interest rates will stay low indefinitely. But analysts say the Fed probably won't signal any new action.

President Barack Obama used the jobs report to press Congress to extend a Social Security tax cut enacted this year that put an extra $1,000 to $2,000 in most workers' pockets. Obama also called for a renewal of emergency unemployment benefits, which provide up to 99 weeks of support. The tax cuts and extra benefits are scheduled to expire at year's end. Economists have cautioned that the end of the two programs could weaken growth in 2012.

Economists aren't expecting much improvement this year. Tom Porcelli, chief U.S. economist at RBC Capital Markets, foresees growth at a modest 2.4 percent annual rate in the last six months - the same as he did before Friday's jobs report. "These numbers are not great," Ian Shepherdson, an economist at High Frequency Economics, said in a note to clients. "But they are a long way from recession territory."

Dan Schneider, founder of SIB Consulting and Development in Charleston, S.C., started hiring one or two employees a month earlier this year. He plans to keep doing so for the next year to year and a half. Business clients pay Schneider's firm to look over their bills and find savings. The company keeps a cut. Schneider started the company during the recession and now employs about 25 people. "The economy is not that great, and people are looking to save money," he said. "We find people more receptive to what we do."

Unemployment came down partly because some people stopped looking for work. Those people are no longer counted as unemployed. There are about 13.9 million people unemployed in the United States, double the total before the recession. The number of people working part time who would prefer full-time work declined. Adding them to people who are unemployed or have given up looking, 25.1 million people are "underemployed," about 16 percent of the work force.

United States Unemployment Rate - June 2011

The unemployment rate in the United States was last reported at 9.2 percent in June of 2011. From 1948 until 2010 the United States' Unemployment Rate averaged 5.70 percent reaching an historical high of 10.80 percent in November of 1982 and a record low of 2.50 percent in May of 1953. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised and those serving in the military. This page includes: United States Unemployment Rate chart, historical data and news.

President Shifts
Focus to Employment

Obama calls for new job legislation

Aug 3, 2011 - Time: 2:50

Merck to slash 13,000 more jobs by 2015!

July 29, 2011

Merck plans to slash up to 13,000 more jobs by 2015, the latest large pharmaceutical corporation seeking to offset slowing sales by cutting costs. Merck expects to continue hiring in growth areas of its business, including emerging markets. The company also will stick with expansion plans at its massive Durham operations, which packages and eventually will grow vaccines to protect against chicken pox and other diseases.

Officials expect to hire more than 150 people at that campus this year, adding to the 450 jobs created during the past few years.

Merck also continues to expand a packaging facility in Wilson that employs about 350 people. Company spokesman David Caouette told media sources that 35 percent to 40 percent of the new job cuts will be in the U.S., but that he couldn't provide specifics.

The cost-cutting news follows a similar strategy at other big drug makers, including Pfizer and GlaxoSmithKline. Faced with increasing generic competition and lower reimbursements from government health programs, the companies are reducing expenses, pushing harder to find promising new drugs and fine-tuning their business to appease investors.


Nonfarm payroll employment was essentially unchanged in June (+18,000), and the
unemployment rate was little changed at 9.2 percent, the U.S. Bureau of Labor
Statistics reported today. Employment in most major private-sector industries
changed little over the month. Government employment continued to trend down.

Household Survey Data

The number of unemployed persons (14.1 million) and the unemployment rate (9.2
percent) were essentially unchanged over the month. Since March, the number of
unemployed persons has increased by 545,000, and the unemployment rate has
risen by 0.4 percentage point. The labor force, at 153.4 million, changed
little over the month. (See table A-1.)

Among the major worker groups, the unemployment rates for adult men (9.1 percent),
adult women (8.0 percent), teenagers (24.5 percent), whites (8.1 percent), blacks
(16.2 percent), and Hispanics (11.6 percent) showed little or no change in June.
The jobless rate for Asians was 6.8 percent, not seasonally adjusted. (See tables
A-1, A-2, and A-3.)

The number of persons unemployed for less than 5 weeks increased by 412,000 in
June. The number of long-term unemployed (those jobless for 27 weeks and over)
was essentially unchanged over the month, at 6.3 million, and accounted for 44.4
percent of the unemployed. (See table A-12.)

The civilian labor force participation rate was little changed in June at 64.1
percent. The employment-population ratio decreased by 0.2 percentage point to 58.2
percent. (See table A-1.)

The number of persons employed part time for economic reasons (sometimes referred
to as involuntary part-time workers) was essentially unchanged in June at 8.6
million. These individuals were working part time because their hours had been
cut back or because they were unable to find a full-time job. (See table A-8.)

In June, 2.7 million persons were marginally attached to the labor force, about
the same as a year earlier. (These data are not seasonally adjusted.) These
individuals were not in the labor force, wanted and were available for work, and
had looked for a job sometime in the prior 12 months. They were not counted as
unemployed because they had not searched for work in the 4 weeks preceding the
survey. (See table A-16.)

Among the marginally attached, there were 982,000 discouraged workers in June,
down by 225,000 from a year earlier. (These data are not seasonally adjusted.)
Discouraged workers are persons not currently looking for work because they
believe no jobs are available for them. The remaining 1.7 million persons
marginally attached to the labor force in June had not searched for work in the
4 weeks preceding the survey for reasons such as school attendance or family
responsibilities. (See table A-16.)

Establishment Survey Data

Total nonfarm payroll employment was essentially unchanged in June (+18,000).
Following gains averaging 215,000 per month from February through April,
employment has been essentially flat for the past 2 months. Employment in most
major private-sector industries changed little in June, while government
employment continued to trend down. (See table B-1.)

Within professional and business services, employment in professional and
technical services increased in June (+24,000). This industry has added 245,000
jobs since a recent low in March 2010. Employment in temporary help services
changed little over the month and has shown little movement on net so far this

Health care employment continued to trend up in June (+14,000), with the largest
gain in ambulatory health care services. Over the prior 12 months, health care had
added an average of 24,000 jobs per month.

In June, employment in mining rose by 8,000, with most of the gain occurring in
support activities for mining. Employment in mining has increased by 128,000 since
a recent low in October 2009.

Employment in leisure and hospitality edged up (+34,000) in June and has grown by
279,000 since a recent low in January 2010.

Employment in government continued to trend down over the month (-39,000). Federal
employment declined by 14,000 in June. Employment in both state government and local
government continued to trend down over the month and has been falling since the
second half of 2008.

Manufacturing employment changed little in June. Following gains totaling 164,000
between November 2010 and April 2011, employment in this industry has been flat for
the past 2 months. In June, job gains in fabricated metal products (+8,000) were
partially offset by a loss in wood products (-5,000).

Construction employment was essentially unchanged in June. After having fallen
sharply during the 2007-09 period, employment in construction has shown little
movement on net since early 2010.

The average workweek for all employees on private nonfarm payrolls decreased by 0.1
hour to 34.3 hours in June. The manufacturing workweek for all employees decreased
by 0.3 hour to 40.3 hours over the month; factory overtime edged down by 0.1 hour
to 3.1 hours. The average workweek for production and nonsupervisory employees on
private nonfarm payrolls remained at 33.6 hours in June. (See tables B-2 and B-7.)

In June, average hourly earnings for all employees on private nonfarm payrolls
decreased by 1 cent to $22.99. Over the past 12 months, average hourly earnings
have increased by 1.9 percent. In June, average hourly earnings of private-sector
production and nonsupervisory employees declined by 1 cent to $19.41. (See tables
B-3 and B-8.)

The change in total nonfarm payroll employment for April was revised from +232,000
to +217,000, and the change for May was revised from +54,000 to +25,000.

The Employment Situation for July is scheduled to be released on Friday, August 5,
2011, at 8:30 a.m. (EDT).

United States GDP Growth Rate

The Gross Domestic Product (GDP) in the United States expanded 1.3 percent in the second quarter of 2011 over the previous quarter. From 1947 until 2010 The United States' average quarterly GDP Growth was 3.30 percent reaching an historical high of 17.20 percent in March of 1950 and a record low of -10.40 percent in March of 1958. The economy of the United States is the largest in the world. The United States is a market-oriented economy where private individuals and business firms make most of the decisions. The federal and state governments buy needed goods and services predominantly in the private marketplace. This page includes: United States GDP Growth Rate chart, historical data and news.

U.S. Economy Grows Just 1.3% in Q2

Published: 7/29/2011 1:44:53 PM

United States real gross domestic product increased at an annual rate of 1.3 percent in the second quarter of 2011, (that is, from the first quarter to the second quarter), according to the "advance" estimate released by the Bureau of Economic Analysis. First-quarter growth was revised down sharply to a 0.4% rate from the earlier estimate of a 1.9% gain.

The increase in real GDP in the second quarter primarily reflected positive contributions from exports, nonresidential fixed investment, private inventory investment, and federal government spending that were partly offset by a negative contribution from state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.

The acceleration in real GDP in the second quarter primarily reflected a deceleration in imports, an upturn in federal government spending, and an acceleration in nonresidential fixed investment that were partly offset by a sharp deceleration in personal consumption expenditures.

Real personal consumption expenditures increased 0.1 percent in the second quarter, compared with an increase of 2.1 percent in the first. Durable goods decreased 4.4 percent, in contrast to an increase of 11.7 percent. Nondurable goods increased 0.1 percent, compared with an increase of 1.6 percent. Services increased 0.8 percent, the same increase as in the first.

Real nonresidential fixed investment increased 6.3 percent in the second quarter, compared with an increase of 2.1 percent in the first. Nonresidential structures increased 8.1 percent, in contrast to a decrease of 14.3 percent. Equipment and software increased 5.7 percent, compared with an increase of 8.7 percent. Real residential fixed investment increased 3.8 percent, in contrast to a decrease of 2.4 percent.

Real exports of goods and services increased 6.0 percent in the second quarter, compared with an increase of 7.9 percent in the first. Real imports of goods and services increased 1.3 percent, compared with an increase of 8.3 percent.

Real federal government consumption expenditures and gross investment increased 2.2 percent in the second quarter, in contrast to a decrease of 9.4 percent in the first. National defense increased 7.3 percent, in contrast to a decrease of 12.6 percent. Nondefense decreased 7.3 percent, compared with a decrease of 2.7 percent. Real state and local government consumption expenditures and gross investment decreased 3.4 percent, the same decrease as in the first.

The change in real private inventories added 0.18 percentage point to the second-quarter change in real GDP after adding 0.32 percentage point to the first-quarter change. Private businesses increased inventories $49.6 billion in the second quarter, following increases of $49.1 billion in the first quarter.