Jobless Rate at 9.5 Percent; 26-Year High

Employers Cut 467,000 Jobs In June; Data Suggests Road To Economic Recovery May Be Bumpy

(CBS/AP)  Last Updated 6:54 p.m. EDT

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U.S. employers cut a larger-than-expected 467,000 jobs in June, driving the unemployment rate up to a 26-year high of 9.5 percent, suggesting that the economy's road to recovery will be bumpy.

The Labor Department report, released Thursday, showed that even as the recession flashes signs of easing, companies likely will want to keep a lid on costs and be wary of hiring until they feel certain the economy is on solid ground.

June's payroll reductions were deeper than the 363,000 that economists expected and average weekly earnings dropped to the lowest level in nearly a year.

However, the rise in the unemployment rate from 9.4 percent in May wasn't as sharp as the expected 9.6 percent. Still, many economists predict the jobless rate will hit 10 percent this year, and keep rising into next year, before falling back.

All told, 14.7 million people were unemployed in June.

If laid-off workers who have given up looking for new jobs or have settled for part-time work are included, the unemployment rate would have been 16.5 percent in June, the highest on records dating to 1994.

"We were on the road of things getting less bad in the jobs market, and that has been temporarily waylaid," said economist Ken Mayland, president of ClearView Economics. "But this doesn't change my view that the recession will end later this year. We're probably two months away."

President Barack Obama said Thursday he was "deeply concerned" about the rising unemployment rate and conceded that too many families are worried about "whether they will be next" to suffer economically.

Mr. Obama touted his administration's efforts to stabilize the financial industry and housing markets, but admitted that "what we are still seeing is too many jobs lost."

Earlier Thursday, a senior Obama administration economic advisor told CBS News the latest unemployment numbers show "the job market remains in the grips of a tough recession."

Jared Bernstein, chief economist for Vice President Joe Biden, told CBS News White House Correspondent Peter Maer that while he believes the administration's economic stimulus efforts are taking hold and helping to stabilize" the economy, more improvement needs to be shown.

"Less bad is not good enough," he said.

Read more of Maer's report on White House reaction

On Wall Street, the employment news pulled stocks lower. The Dow Jones industrials lost about 170 points in morning trading, and broader indices also fell.

Since the recession began in December 2007, the economy has lost a net total of 6.5 million jobs.

As the downturn bites into sales and profits, companies have turned to layoffs and other cost-cutting measures to survive. Those include holding down workers' hours and freezing or cutting pay.

CBS News correspondent Anthony Mason reports that Connecticut has a "work-share" program, which allows employers to reduce hours for their employees, and makes up have their lost wages with unemployment funs. Seventeen other states have similar programs.

The average work week in June fell to 33 hours, the lowest on records dating to 1964.

Layoffs in May turned out to smaller, 322,000, versus the 345,000 first reported. But job cuts in April were a bit deeper - 519,000 versus 504,000, according to government data.

Even with higher pace of job cuts in June, the report indicates that the worst of the layoffs have passed. The deepest job cuts of the recession came in January, when 741,000 jobs vanished, the most in any month since 1949.

And there was some other encouraging job news Thursday.

In a separate report, the department said the number of newly laid-off workers filing applications for unemployment benefits fell last week to 614,000, in line with economists' predictions. The number of people continuing to draw benefits unexpectedly dropped to 6.7 million.

Meanwhile, the Commerce Department said orders placed with U.S. factories rose 1.2 percent in May, the most in 11 months. The increase also was better than economists expected.

Still, job losses last month were widespread.

Professional and business services slashed 118,000 jobs, more than double the 48,000 cut in May. Manufacturers cut 136,000, down from 156,000. Construction companies got rid of 79,000 jobs, up from 48,000 the previous month. Retailers eliminated 21,000, up from 17,600. Financial activities cut 27,000, following 30,000 in May. The government cut 52,000 jobs, up from 10,000 the previous month. Leisure and hospitality cut 18,000 jobs, erasing a gain of the same size in May.

One of the few industries adding jobs: education and health services, which added 34,000 positions last month and 47,000 in May.

Mayland and other economists said a good chunk of June's job losses likely were affected by shutdowns at General Motors Corp. and fallout from the troubled auto industry, which should let up later this summer. The government said employment at factories making autos and parts fell by 27,000 last month.

Payroll losses and the unemployment rate are derived from two separate statistical surveys. The jobless rate probably would have moved higher if not for people dropping out of the labor force.

With the weakness in the job market, workers didn't see any wage gains in June. Average hourly earnings were flat at $18.53. Average weekly earnings fell from $613.34 in May, to $611.49 in June, the lowest level in nearly a year and the first drop since March. That raises fresh questions about consumers' willingness to spend in the months ahead.

The worst crises in the housing, credit and financial markets since the 1930s have plunged the country into the longest recession since World War II.

Many think the jobless rate could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. Some think the rate will top out at 11 percent. The post-World War II high was 10.8 percent at the end of 1982, when the country had suffered through a severe recession.

Federal Reserve Chairman Ben Bernanke predicts the recession will end this year, with many economists forecasting that the economy will start to grow again as soon as the current July-September quarter.

But recoveries after financial crises tend to be slow, which is why economists predict it will take years for the job market to return to normal. Some predict the nation's unemployment rate won't drop to 5 percent until 2013.

An elevated unemployment rate could become a political liability for President Barack Obama when congressional elections are held next year. The last time the unemployment rate topped 10 percent, the party of the president - then Ronald Reagan's GOP - lost 26 House seats in midterm elections in 1982.

So far, many people are saving - rather than spending - the extra money in their paychecks from Mr. Obama's tax cut, blunting its help in bracing the economy. Much of the economic benefit of Mr. Obama's increased government spending on big public works projects won't kick in until 2010, analysts say.

The White House last week said federal money was being shoveled out of Washington quickly, but states aren't steering the cash to counties that need jobs the most.

Large job cuts have continued this week. Newspaper publisher Gannett Co. said it plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue. Farm machinery company Deere & Co. said 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer.

[drsam8]

The President appears to be losing a bit of public support right now because of the high unemployment numbers. Before Republican politicians begin to rejoice, they must ask themselves : what is their fall back strategy when the economy begins to rebound and employment figures begin to go up? I remind them that only about 10 per cent of the stimulus money has been allocated. Therefore, the Obama adminstration must ditch the rather wooley argument about misreading the extent of the problem"that sounds more like excusses and lack of proper insight and homework. The President, and the administration, must insist that we will get a better picture of program's effectiveness only after about at least 60 per cent of the stimulus money has been allocated or spent. Here one must ask: Is Vice-President Biden the right man for this"is he getting the money out quickly enough? The adminstration had initially presented a compelling argument that speed was of essence in approving the stimulus package. Why the delay now in getting the money out? The adminstration will ultimately lose its credibility on the other big ticket items if public perception continues to erode. Republican Party politicians seem better at fraiming the issues to their advantage and they work with the best public relations firms. Democrats must realize that in politics perception is everything. They are in a public relations war with their opponents. They cannot afford to lose this war when so much that is important remains to be done!

[latentid]

When Bush was in office, the Democrats had a substantial presence in the Congress (see the number of Democrats in Congress from 2004 to 2008 - you will be surprise). The fact is, they had no clue how to react in difficult circumstances. Now that the economy is in shambles, we don't expect them to do much. Reading the comments in this forum it is quiet evident that even the mindless followers of big O have no clue what the word "economy" means. A 9.5% unemployment rate is a 9.5% unemployment rate. The fact is your Messiah is stabbing you on the back and you are thanking him for the silverware.

[pepperwood2]

Jobless Rate at 9.5 Percent; 26-Year High - Employers Cut 467,000 Jobs In June; Data Suggests Road To Economic Recovery May Be Bumpy.

The Libs took over 3 years ago in Congress - Congress & BO voted to Bail Out (reward) Wall Street, Auto Manufacturers, Savings & Loan, Banks, GW , Big Oil, The Lib States that Economies are on Life Support, Like Kaliphonia, for doing such a good job of Cheating the American People. They even went out of their way to find the right tax cheats to run the
Country.

They've been working on the Cap & Trade Emission Plan for the crooks involved in the GW community, Tax & Spend, Encouraged the people to Spend, Spend, Spend. The Banks & Credit Card Cheats will be there waiting to HELP you AGAIN. Invest in Wall Street, BUY a NEW Car, Build a NEW House, Borrow more and often. SOMETIMES the best Buys & Deals are the ones you don't make.

You see people, accountability & responsibility, is not needed in the Public or Private Sector. When you can pass off the charges on the People who have been cheated and are paying for all this mess these Libs have created with no end in sight. Business as usual they call it. Don't feel bad because Not one of these Representatives, Tax Cheats, or Frauds running our Country will lose their Job.

We The People, are just trying to afford to feed, cloth, & shelter OUR Families. While the Libs are scheming up ways to add cap & trade emissions, disposal, & other hidden GW charges on us. But they say its ok to destroy the planet, building new homes & highways. This is called the American Scheme. So So Very Sad!

[oftencensord]

How can 600,000 people be laid off each week, and there only be 467,000 jobs lost? That makes no sense, it sounds more like 2.4 million jobs to me.

Remember Obama decided to bailout failing car companies, I lost track, 40, 50, 60 billion?, spent 60 billion on Americorps (LOL),a couple hundred billion to save AIG and cover all the stock market losses to foreign investors, 700 billion on TARP which was supposed to save jobs, but even the government is axing its own employees! AT the same time he is jacking UP the tax rates on small business owners, stealing the money to pay wages and buy goods and services !!! What a disaster... could they ( Obama )possibly do any thing more wrong?...

He could have put a freeze on Government spending, and actually increased the value of the dollar.

He could have lowered the capital gains tax to pump money into the hands of employers.

He could have lowered the tax rates on people making $250K+ a year, who are the people out buying the goods and services that keep people employed.

He could have given a $5000 tax credit to help people to buy health insurance, and freed more money to the consumer.

He could have been supportive of business instead of hostile, and the stock market would have recovered already.

All of this sound familiar? It was the McCain/Palin plan, the one that would be working now.

[spaceatoms]

I don't envy President Obama; the wealthy control the market and the political scene and they are also the smart ones, but the bailouts are the worst part of this. A democracy which is the general model of our country means that government intervention should be kept at a minimum for the good of the people. Its not an oligarchy where the few investors get to have the money, its not intended to work that way. We are pushing the model to far towards a socialist country and you can see the pain of it all with thousands of jobs lost, its only going to get worse. We have plenty of food for everyone and good natural resources, so we should return to the old model, but we need a crash of major proportions to deglobalize the mess, and return the unearned money back into society.

[wdh3007]

The nation's jobless rate scored its biggest year-to-year June increase in four decades losing 6.1 million jobs in one year's time a nearly 70 percent spike. It is clearly evidant this guy was put into office to reward the gangsters of Wall Steet and Goldman Sachs. The 787 billion was a scam of our wasted money to pay off those that voted in our communist fraud in chief.

[dartplayer501]

I gotta run - chatting has been fun as usual, except for cheney who's just as much a menace to Freedom and the American way as his name-sake. As we say in England - Have a happy good-riddance day on the 4th and TTFN.

[dartplayer501]

Not even close as a percentage. Why is it that only you rightists call Obama "saviour" or "Messiah." No dem ever does that. I'd have thought your "base" would consider the use of those terms blasphemy.

[salmoc44]

darthcheney345,
"Reagan - the fact remains, we WERE better off at the end of his four years."

Yeah, with an exploded deficit, a bigger dependence of foreign oil, an appeased Iran that Reagan sold missiles to in order to fund terrorists in Central America, and Saddam Hussein as one of our buddies. Good times.

[specialty8]

Your pal and savior Obama has probley spent more his first 6 months than Reagan did in eight years.

[GiveMeFreedom]

Well Liberals, hope all is well on the unemployment and welfare lines today. More people losing their jobs and just think the healthcare bill and cap and trade have yet to add to the job losses. Before you liberals are done there will be even more losses.

As in CA, keep up with liberal spending and taxation and in short order there will be no jobs or businesses left. Then you can do what you liberals do best - blame the republicans.

[dartplayer501]

Well, Schwartzeneggar is a republican after all.

[salmoc44]

dartplayer501,
"Now lets see, who was in power 26 years ago? HMMMM - that would be 1983. HMMM - that would be Ronnie Ray-gun the godfather of the neocons! Well, who'd'a thunk?"

But, according to Con logic, a Republican President bears no responsibility for the economy more than a few years into office if that economy is bad. Yet, a Democrat is responsible for the economy's performance pretty much at the start of his Presidency, if it's bad.

[darthcheney345]

LOL!

People STILL blame Bush for the downturn of March/April 2001.

Did ANY Democrat blame Clinton for ANYTHING starting the day after he left office???

Oh, please. You're just saying the opposite of the truth.

Reagan - the fact remains, we WERE better off at the end of his four years.

You both are just allergic to facts.

[specialty8]

Yep, that was then and this is now. History will always recall who was running the show. Now it is another "historical" or should I say Hysterical moment for the community organizer.Highest unemployment and hyper inflation just around the corner. Where is foot in the mouth Biden when we need a good laugh? Thats right he flying around over in Iraq making us look stupid.

[dartplayer501]

"Jobless Rate at 9.5 Percent; 26-Year High"

Now lets see, who was in power 26 years ago? HMMMM - that would be 1983. HMMM - that would be Ronnie Ray-gun the godfather of the neocons! Well, who'd'a thunk?

[darthcheney345]

Here's a clue - 26 years ago is when it was going DOWN from the Carter (D) disaster.

Now it's going back UP. Coincidentally, while another Democrat is the president.

It's just laughable that Democrats can't understand simple logic like this.

[dartplayer501]

You obviously have NO IDEA what you are talking about. Check this out -

The unemployment rate was 6.3% when Ray-gun took office. By the end of 1982 it was 10.8%. When Bush I took over it was back to 5.7%, he ran it up to 7.7% by the time Clinton took office. Under Clinton it was was back under 6% by 1994 and under 5% by 3/97 where it stayed. When Shrub took over it was 4.2%. In his first two years it rose back up to 6%, then dropped a little, and then finally started up again in 8/08.

[darthcheney345]

You obviously have NO IDEA what you are talking about.
--------------

Silly me. Here I was thinking Reagan got re-elected to a second term, and his vice president was the next president, because the economic recovery was so successful on Reagan's watch.

Oh, wait. HE DID.

Sounds like you're the one trying to deny all facts, logic, and history in your desperation to preserve some shred of a defense for the utter failure of Obama.

[dartplayer501]

Yes, nothing but lies and revisionist history - typical neo post.

[dartplayer501]

Yes the unemployment improved in Ray-gun's 2nd term - but the deficit grew exponentially. Now Obama is increasing the deficit and that's a bad thing. Interesting. It also took Ray-gun 2 years reach the nadir of his "revision of the economy" and another six to get it right again. You're claiming Obama's done in six months!!! Jeez what a bunch!! Oh, and the only reason Bush I was elected was the usual GOPig party dirty tricks, if you can't beat 'em destroy their characters.

[dartplayer501]

Maybe darthcheney is demslie in disguise. Same amout of idiotic vitriol with the same total lack of original thought behind it. Must be one of Bill Ingvall's people who wears the "I'm Stupid" sign.

[darthcheney345]

Hmm ... nothing here but tauntint, name calling, insulting, jeering, and sneering, with no actual facts or logic to contribute to the discussion.

Yep, your typical Democrat post.

[salmoc44]

I'm glad Cons are blaming Obama for events taking place less than 6 months into his Presidency. Because, logic then dictates that 9-11 was Bush's fault. And, logic also dictates that the serious economic hardships in 1983 were Reagan's fault.

[darthcheney345]

Because, logic then dictates that 9-11 was Bush's fault.
---------------------
They DID say 9/11 was Bush's fault.

Don't try to back down on it now.

September is just around the corner.

Obama will be to blame BIG TIME on 9/11/2009.

[dartplayer501]

I just wonder how many rightist morons there are here crowing about Obama's demise and generally wishing that the economy will fail, are the same ones accusing the left of high treason when we were criticizing Bush a year ago. You are showing the exact same hatre for your country as you accused us of then. My guess is it's the same group. Same morons, different president. I certainly hope you all blame Obama this time next year when the economy's turned and prosperity is beginning to set in again.

[darthcheney345]

generally wishing that the economy will fail
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News flash: THE ECONOMY HAS FAILED.

It is on Obama's watch.

Obama is to blame.

Hey, they blamed Bush for the economic downturn of March/April 2001.

This is way past April now.

Oh ya, this is Obama's watch.

[specialty8]

Steve, you might want to go to another artical that pats Obamas back and glorifies him. Seems this story has been taken over by the working people worring about their jobs and not about Obamas celebrity status.

[darthcheney345]

OBAMA IS A FAILURE.

OBAMA IS THE WORST PRESIDENT IN 100 YEARS.

OBAMA HATES THE WORKERS.

OBAMA IS DETERMINED TO DESTROY THE USA ECONOMY.

OBAMA IS OUR ENEMY.

There is no way Obama will get a second term

Madoff proved there is a limit to what a Democrat can get away with.

Obama has already done far more damage than Madoff.

When will people learn - Democrats are just as destructive as Republicans?

It's time to stop blaming Bush and face reality. The Democrats are fully in charge if this disaster.

[ibsteve2u]

lolll...I still think CBS should retrieve the IP addresses of all commenters and store them in a database, and then have a button attached to all comments that you could click that pops up a window listing all of the aliases that have been seen originating from a commenter's IP address.

I really think some of the righties use multiple screen aliases to add "voices" in support of their positions.

[darthcheney345]

I thought only the liberals did that.

[GiveMeFreedom]

Oh Steve you are way too cynical - you must be a liberal and hate free enterprise. I hear Venezuela has the model you are looking for and with the recent brain drain down there they are looking for some people like you to work for next to nothing and get little in return. Enjoy the vacation down there.

[ibsteve2u]

You sort of have to hope that the righties know that they are lying, don't you?

Any other alternative has to include psychosis...and that is a somewhat worrisome thought, given their addiction to phallic substitutes like automatic weapons.

[specialty8]

I say its time for another million dollar Whitehouse party! Party on Obama, us grunts will survive somehow. Lets get on that global warming, whats a few more of your new taxes going to hurt. You can't get blood out of a onion anyway.