WASHINGTON, Aug. 1, 2008
U.S. Jobless Rate Rises To 4-Year High
5.7 Percent Unemployment Rate In July Reflects 51,000 Job Cuts; Wages Rise Slightly
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(CBS/AP)
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Payroll cuts weren't as deep as the 72,000 predicted by economists, however. And, job losses for both May and June were smaller than previously reported.
July's reductions marked the seventh straight month where employers eliminated jobs. The economy has lost a total of 463,00 jobs so far this year.
The latest snapshot, released by the Labor Department on Friday, showed a lack of credit has stunted employers' expansion plans and willingness to hire. Fallout from the housing slump and high energy prices also are weighing on employers.
The increase in the unemployment rate to 5.7 percent, from 5.5 percent in June, in part came as many young people streamed into the labor market looking for summer jobs. This year, fewer of them were able to find work, the government said. The unemployment rate for teenagers jumped to 20.3 percent, the highest since late 1992.
Wall Street initially found reason for optimism in the report, but news that General Motors Corp. had a $15.5 billion loss in the second quarter weighed on investors. Shares were mixed in early trading.
The economy is the top concern of voters and will figure prominently in their choices for president and other elected officials come November. The faltering labor market is a source of anxiety not only for those looking for work but also for those worried about keeping their jobs during uncertain times.
Job losses in July were the heaviest in industries hard hit by the housing, credit and financial debacles. Manufacturers cut 35,000 positions, construction companies got rid of 22,000 and retailers shed 17,000 jobs. Temporary help firms - also viewed as a barometer of demand for future hiring - eliminated 29,000 jobs. Those losses swamped job gains elsewhere, including in the government, education and health care.
In May and June combined, the economy lost 98,000 jobs, according to revised figures. That wasn't as bad as the 124,000 reductions previously reported.
GM, Chrysler LLC, Wachovia Corp., Cox Enterprises Inc. and Pfizer are among the companies that have announced job cuts in July.
GM Friday reported the third-worst quarterly loss in its history in the second quarter as North American vehicle sales plummeted and the company faced expenses due to labor unrest and its massive restructuring plan.
On July 15, GM announced a plan to raise $15 billion for its restructuring by laying off thousands of hourly and salaried workers, speeding the closure of truck and SUV plants, suspending its dividend and raising cash through borrowing and the sale of assets.
GM also said it would reduce production by another 300,000 vehicles, and that could prompt another wave of blue-collar early retirement and buyout offers.
Meanwhile. Bennigan's restaurants owned by privately held Metromedia Restaurant Group, are closing, driving more people to unemployment lines.
All told, there were 8.8 million unemployed people in July, up from 7.1 million last year. The jobless rate last July stood at 4.7 percent.
More job cuts are expected in coming months. There's growing concern that many people will pull back on their spending later this year when the bracing effect of the tax rebates fades, dealing a dangerous blow to the fragile economy. These worries are fanning recession fears.
Still, workers saw wage gains in July.
Average hourly earnings rose to $18.06 in July, a 0.3 percent increase from the previous month. That matched economists' expectations. Over the past year, wages have grown 3.4 percent. Paychecks aren't stretching as far because of high food and energy prices.
The Federal Reserve is expected to hold rates steady next week as it tries to grapple with dueling concerns - weak economic activity and inflation.
In June, the Fed halted a nearly yearlong rate-cutting campaign to shore up the economy because lower rates would aggravate inflation. On the other hand, boosting rates too soon to fend off inflation could hurt the economy.
© MMVIII The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.
Add a Comment See all 109 Comments
- The American People want real jobs. This country must develop steel plants, coal mines, oil fields, intercontinental trains, automobile factories, and ship yards. There is no reason to rely on foreign imports. Minimum wage jobs are not viable. The United States should not reach 10% unemployment. The environmentalists have it wrong. America must reject welfare, fad ecology, and lying politicians.
- Reply to this comment
- Economy grows at soft pace.. Posted by terrorislamv
- Reply to this comment
- The numbers and statistics provided by the Government, to date, in almost all areas of the economy have been jaded to misrepresent the true failure of our elected and appointed leaders to control corruption, mismanagement and favoritism.
Do they really expect us to believe 5.7% when all you have to do is look around and talk to your neighbor. These people are such *********!!! - Reply to this comment
- Fox, drudge, and politico will report news that you won''''t hear in the mainstream media. So if you never go there, you are uninformed.
Posted by AtheismWins at 07:05 PM
LOL!
That''s like saying unless you read the National Enquirer you don''t understand the entertainment business. - Reply to this comment
- Judge rejects immunity claim, says White House aides can be subpoenaed
And now for the news... - Reply to this comment
- Yeah, I''''ll buy that. That''''s why I go to the ones with instant comments. At least that provides some sort of balance.
Posted by AtheismWins at 07:51 PM : Aug 01, 2008
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And I just signed on to USAtoday.com. I found that comment site to be far superior by design.
One notable feature... NO DOUBLE APOSTROPHES! - Reply to this comment
- Cheney Wanted To Dress Up Navy Seals As Iranians And Shoot At Them To Get His War With Iran
And now for the news... - Reply to this comment
- There are no Woodward and Berstein''''s anymore.
Posted by trillion1 at 07:35 PM : Aug 01, 2008
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There''s still Seymour Hersch. But that is just one man against a tide of propaganda and posturing! - Reply to this comment
- McCain tries to scrub his website: They called him A Political Celebrity
And now for the news... - Reply to this comment
- Almost all the news groups seemed to be compromised in one way or another. If they had been objective and , heaven forbid, actually did some research we would not be in Iraq now. There are no Woodward and Berstein''''s anymore.
Posted by trillion1 at 07:35 PM : Aug 01, 2008
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Yeah, I''ll buy that. That''s why I go to the ones with instant comments. At least that provides some sort of balance. - Reply to this comment
- Senate Republicans Block Troop Funding Bill
And now for the news... - Reply to this comment
- Wal-Mart To Employees: Beware Of Democratic Win
And now for the news... - Reply to this comment
- Gas Up, Cars Down: GM Posts $15.5 Billion 2nd-Quarter Loss
And now for the news... - Reply to this comment
- Almost all the news groups seemed to be compromised in one way or another. If they had been objective and , heaven forbid, actually did some research we would not be in Iraq now. There are no Woodward and Berstein''s anymore.
- Reply to this comment
- Generally I''''m at USAToday. I like sites with instant comments. All opinions need to be aired. Less "inbreeding" that way.
Posted by AtheismWins at 07:29 PM : Aug 01, 2008
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Ah, instant comments?!
I''ll have to check that out!
Thanks for the tip. - Reply to this comment
- I''''''''ll check them out when I get a chance. I''''''''ve looked at opensecrets a little bit. Don''''''''t remember much about it.
Posted by AtheismWins at 07:14 PM : Aug 01, 2008
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That is one of my personal favorites, as they are the most unbiased that I have seen.
I just can''''t trust CNN or Fox much anymore.
Posted by DaysRnumbrd at 07:20 PM : Aug 01, 2008
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Generally I''m at USAToday. I like sites with instant comments. All opinions need to be aired. Less "inbreeding" that way. - Reply to this comment
- Posted by AtheismWins at 07:14 PM : Aug 01, 2008
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It is no wonder why people called CNN the "Clinton News Network" back in the late 90s!
It''s all about the "talking points". Various radio commentators get these all the time, from both sides to both sides. - Reply to this comment
- I''''ll check them out when I get a chance. I''''ve looked at opensecrets a little bit. Don''''t remember much about it.
Posted by AtheismWins at 07:14 PM : Aug 01, 2008
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That is one of my personal favorites, as they are the most unbiased that I have seen.
I just can''t trust CNN or Fox much anymore.
One of the statements that Scott McClellan also said (on Hardball with Chris Matthews), was that previous administration(s) have sent talking points to various news outlets that they deem as "friendly" to the administration at the time. Now that is quite scary that so-called media outlets will call themselves "news" and yet spew whatever propaganda from whichever administration is in power at the time. - Reply to this comment
- Fox, drudge, and politico will report news that you won''''''''t hear in the mainstream media. So if you never go there, you are uninformed.
Posted by AtheismWins at 07:05 PM : Aug 01, 2008
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Drudge also gets the White House talking points.
Politico.com, however, is generally unbiased unless it is an editorial. Their website is on the better side of political news. Other political websites, worthy of viewing regularly:
opensecrets.org
factcheck.org
Posted by DaysRnumbrd at 07:09 PM : Aug 01, 2008
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I''ll check them out when I get a chance. I''ve looked at opensecrets a little bit. Don''t remember much about it. - Reply to this comment
- Is Fox News really news? I thought it was part of the republican propaganda machine
Posted by ender18 at 06:53 PM : Aug 01, 2008
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It is. As Scott McClellan had admitted last week, the White House sends talking points to Fox "News" on a regular basis, and they report it as fact... not as the PR that it is.
Posted by DaysRnumbrd at 07:05 PM : Aug 01, 2008
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Liberal conspiracy baloney is just pathetic. Then again, it''s also a little entertaining : )
Bush plotted the rise of gas to help his oil buddies, right? Lol. - Reply to this comment
