Unemployment Rises Nationwide To 9.2 Percent As Hiring Stalls
NEW YORK (CBSNewYork/AP) – It will be two more weeks before the Tri-State Area finds out its unemployment rates for the month of June, but if the national unemployment numbers released Friday are any indication of what’s to come, it doesn’t look good.
Hiring nationwide slowed to a near-standstill last month. Employers added the fewest jobs in nine months and the unemployment rate rose to 9.2 percent.
The economy generated only 18,000 jobs last month and needs to add 125,000 jobs per month just to keep pace with population growth. What’s worse, more people — 250,000 last month alone — have just stopped looking for work, reports CBS 2’s Marcia Kramer.
“We’ve added more than 2 million new private sector jobs over the past 16 months, but the recession cost us more than 8 million. And that means we still have a big hole to fill,” President Barack Obama said on Friday.
It’s a double whammy for the economy. The new job report shows job creation has slowed to a trickle, and new evidence has emerged that Americans don’t have the skills to take the jobs that do exist.
“We’re not doing a good enough job preparing young people for the jobs that exist in today’s economy,” said Harvard University’s William Symonds.
The hard-to-fill jobs include skilled trades like plumbers and carpenters, sales reps and drivers, people who need a technical degree — not a liberal arts education.
“We’ve taken a very academic sort of one-size-fits all to education with the goal, frankly, that most students are going to a four-year college,” Symonds said.
The latest report offered stark evidence that the recovery will be painfully slow. It also raised doubts that the economy will rebound in the second half of the year after hitting a spring slump. The report touched off partisan wrangling in Washington. Staten Island Congressman Michael Grimm blamed President Obama and Democratic policies.
“The problem in this country is the government, Washington, is broken. The bureaucracy here is just ridiculously large,” Grimm said.
1010 WINS’ Glenn Schuck reports: New Numbers, More Worries
The bad news on unemployment is on the minds of many New Yorkers.
Pat Larson said her friend, who worked at a high executive level, has been out of work for almost two years and the new numbers have her fearing about her job security.
“I’m nervous because I work in health care and you know what has happened to health care in the last couple of years,” Larson said. “If I lose my job, I lose my health insurance. I’m in big trouble.”
Outside the Work Force One center in Harlem, many job seekers say the market is tight.
“The economy sucks right now and the businesses, we need the businesses to stop outsourcing,” said Harlem resident Willie Caraway. “We need to think about the United States and the people here.”
“If the people dont have the knowledge to work, then how can they work?” added Linda Woods of Bed Stuy.
Businesses added just 57,000 jobs last month, the fewest in more than a year. Governments cut 39,000 jobs. Over the past eight months, federal, state and local governments have cut a combined 238,000 positions.
On Wall Street, stock futures plunged after the report’s release.
Two years after the recession officially ended, companies are adding fewer workers despite record cash stockpiles and healthy profit margins.
Economists have said that temporary factors have, in part, forced some employers to hold back on adding workers and high gas prices have cut into consumer spending.
The weak economy and slow hiring is causing more people to simply give up looking for work. More than a quarter-million people stopped their job searches in June. That kept the unemployment rate from rising even further. When laid-off workers stop looking for work, they are no longer counted as unemployed.
Including discouraged workers and those working part-time, but who would prefer full-time work, the “under-employment” rate jumped from 15.8 percent to 16.2 percent.
Unemployment has topped 8 percent for 29 months, the longest streak since the 1930s. It has never been so high so long after a recession ended. At the same point after the previous three recessions, unemployment averaged just 6.8 percent.
The number of unemployed workers rose almost 175,000 to 14.1 million, pushing up the unemployment rate.
But there are signs that the economy could improve in the second half of the year. Gas prices have started to come down since peaking in early May at a national average of nearly $4 per gallon. Prices averaged $3.59 a gallon nationwide on Friday, according to AAA.
In New Jersey, gas prices were pretty close to the national average on Friday. Prices in Essex, Bergen and Passaic counties were between about $3.43 and $3.63 per gallon, according to GasBuddy.com.
In New York, prices were slightly higher. In Manhattan, prices ranged between $3.89 and $4.23 per gallon.
But what’s really needed are more jobs to boost incomes and consumer spending, which fuels 70 percent of the economy. Without more hiring, the economy may not be able to accelerate from its current weak pace of growth.
The economy is expected to grow at a 3.2 percent pace in final six months of the year, according to an Associated Press survey of 38 economists. But the latest report could prompt some economists to revise their forecasts.
The economy would need to grow 5 percent for a whole year to significantly bring down the unemployment rate. Economic growth of just 3 percent a year would hold the unemployment steady and keep up with population growth.
Many lawmakers are trying to help the unemployed have a better chance of getting a job.
The bill would keep employers from posting job ads that discourage the unemployed from applying to vacant positions, similar to a new law in New Jersey.
Back in April, legislation was sent to Gov. Chris Christie that would extend the amount of time jobless residents could receive unemployment benefits.
Regional and state unemployment numbers for the month of June are due out on July 22.
(TM and Copyright 2011 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2011 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)