President Obama’s highly-touted Recovery Summer continued to unravel as the US economy “unexpectedly” suffered a net loss of 131,000 jobs in July. However, the jobless rate, calculated separately via household surveys, remained steady at 9.5 percent as the size of the workforce declined proportionately. According to the survey, a growing number of unemployed have simply abandoned hope of procuring a job.
The drop in payrolls in last month is attributed primarily to the dismissal of nearly 143,000 temporary census workers. The private sector added a paltry 71,000 jobs, hardly evidence of an economic recovery.
Also continuing a troubling pattern, the previous month’s employment data was downwardly adjusted. Payrolls in June actually fell by 221,000, far more than the 125,000 decline initially reported. The US economy lost 352,000 jobs in June and July. This figure presumes the July numbers will not be adjusted likewise.
The July report also reveals that a stunning 45 percent of the 14.7 milliion unemployed Americans have been out of work for longer than 6 months. Some have speculated that the repeated extension of unemployment benefits may be contributing to this figure. As many jobless do eventually lose their benefits, they are no longer counted in the unemployment figures. For this reason, the gap between the headline rate (the official unemployment rate per ILO definition, U-3) and the total unemployment rate (U-6) remains large as total unemployment holds steady at 16.5 percent.