Employment Picture Still Gloomy
WASHINGTON, Aug. 1, 2003
(CBS MarketWatch) The labor market continued to shed jobs in July, the
government reported Friday.
July payroll employment fell by 44,000 jobs. The unemployment rate edged
down to 6.2 percent from 6.4 percent last month. Economists polled by CBS
MarketWatch looked for an increase of 13,000 jobs and a jobless rate to
remain unchanged at 6.4 percent from June.
Much of decline in he unemployment rate represented the exodus of 470,000
discouraged people who abandoned job searches because they believed no jobs
were available.
In another piece of bad news, June's payroll loss was revised to 72,000 from
the 30,000 drop first reported.
Manufacturing, retail trade and government all reported job losses, while
the temporary help sector and the construction industry expanded their
payrolls.
In Washington, CBS News White House Correspondent Peter Maer reports that
President Bush met with his cabinet to discuss "job creation."
Responding to the unemployment report, White House spokesman Scott McClellan
said Mr. Bush is still concerned about "a jobless recovery." McClellan said
"too many people are looking for work."
The July job loss was the latest in a string of consecutive monthly payrolls
declines since February now totals 486,000 lost jobs. The average workweek
fell by six minutes in July. Factory hours fell by 12 minutes. Overtime in
the factory sector was unchanged.
The lackluster job market, however, hasn't stopped consumers — the main
force keeping the economy afloat — from spending.
In a second report, consumer spending and Americans' incomes each rose by
0.3 percent in June, the Commerce Department said. The income gain matched
economists' expectations, while the spending figure was slightly weaker.
The economy grew at a 2.4 percent rate in the second quarter, helped out by
the biggest increase in defense spending since the Korean War. While that
was an improvement over the mediocre growth seen in the previous two
quarters, it still wasn't strong enough to help the labor market.
Federal Reserve Chairman Alan Greenspan and private economists believe the
economy will stage a rebound in the second half of this year. President
Bush's tax cuts along with near rock-bottom short-term interest rates should
motivate consumers and businesses to spend and invest more, giving the
recovery a lift.
Some economists are predicting a growth rate in the second half in the range
of 3.5 percent to 4 percent or more.
Even if that turns out to be the case, it will take time for the job market
to show real improvement, economists said. Companies, wanting profits to
improve and wanting to be more certain of the recovery's strength, will wait
before stepping up full-time employment, analysts said.
http://www.cbsnews.com/stories/2003/08/01/national/main566203.shtml
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