Friday, August 07, 2009

Unemployment picture

Recovery Act saving jobs, but long-term unemployment highest in 70 years
August 7, 9:08am
The July unemployment report released this morning by the Bureau of Labor Statistics detailed the 19th month of the recession, showing that 247,000 more jobs were lost in July but unemployment was little changed, declining 0.1 percentage points to 9.4% as 422,000 people dropped out of the labor force. The number of workers who have been unemployed for over six months increased by 584,000 to 5 million, so that now over one-third of this country's 14.5 million unemployed workers have been unemployed for over half a year.

The pain in the real economy is clearly deepening, but it is doing so much more slowly than during the winter months, when the economy regularly shed around 700,000 jobs. The American Recovery and Reinvestment Act is now providing a significant boost, most likely adding 3 percentage points to GDP growth in the second quarter, which likely created or saved around 720,000 jobs. The job losses in July would likely have been nearly double without the impact of the recovery act.

"The recovery act is now creating hundreds of thousands of jobs but you can’t put out a house fire with one hose. Additional policy interventions by Congress are desperately needed to provide relief and generate jobs, including an immediate extension of federal unemployment benefits for the long-term unemployed," said economist Heidi Shierholz. "Weekly earnings didn't grow over the last six months, so we can see it will be difficult to generate growing consumption and a robust recovery," said EPI president Lawrence Mishel.
From Economic Policy Institute.
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