A half-year of job losses
As the unemployment rate holds at 5.5%, the outlook isn't especially bright.
By Chris Isidore, CNNMoney.com senior writer
Last Updated: July 3, 2008: 10:30 AM EDT
NEW YORK (CNNMoney.com) -- Employers trimmed jobs from their payrolls in June for the sixth straight month, as the government's closely watched report Thursday showed continued weakness in the labor market.
The Labor Department reported a net loss of 62,000 jobs in the month. That matched the job loss figure for May, which was revised higher from 49,000. Economists surveyed by Briefing.com had forecast a loss of 60,000 jobs.
The June number brought to 438,000 the number of jobs lost by the U.S. economy so far this year.
The unemployment rate stayed at 5.5%. Economists had forecast the rate would come in at 5.4% in the latest reading.
In a separate report, the department said initial claims for unemployment insurance rose 16,000 to 404,000 in the latest week. Economist Robert Brusca of FAO Economics said the reading over 400,000 is a "classic recession signal."
And the even more closely watched four-week moving average for initial claims neared that worrisome 400,000 benchmark, reaching 390,500 - the highest level since the four weeks after 2005's Hurricane Katrina.
The four-week average hasn't been at or above the 400,000 mark since 2003.
The job losses in the monthly report were concentrated in manufacturing and construction, two sectors that have been badly battered in the current economic downturn.
Manufacturing lost 33,000 jobs, even as the troubled auto and auto parts makers posted a modest gain. Construction lost 43,000, with about half of that coming from contractors and subcontractors in the home building segment of the market.
But the job losses were not limited to those areas. Retailers trimmed 7,500 jobs, while business and professional services cutting 51,000 jobs.
Mitigating the decline were government employers, who added 29,000 jobs, education and health services, which also added 29,000, and leisure and hospitality, which saw a 24,000-job increase.
Still the report showed a worrisome spreading of economic weakness, according to Lakshman Achuthan, managing director of the Economic Cycle Research Institute. He said this report is further proof that the nation has fallen into a recession.
"This is pretty much as expected, but expected isn't good news these days," he said. "What it boils down to is a drip, drip, drip of ominous information."
The seasonally adjusted average hourly wage edged up 6 cents to $18.01, which was in line with forecasts, while the average hourly work week stayed unchanged.
Wages are not keeping pace with inflation, as the average wage is now up 3.4% over the last 12 months, less than the 4.5% rise in prices over the 12 months ended in May as reported by the government.
Obama, McCain react
The presidential campaigns of John McCain and Barack Obama both issued statements saying that the current problems in the labor market justified immediate action from Congress, with each arguing he had the right solution for the economy.
"The American people cannot afford an economic agenda that will take our country in the wrong direction and cost jobs," said the statement from McCain, the presumptive Republican candidate. "At a time when our small businesses need support from Washington, we cannot raise taxes, increase regulation and isolate ourselves from foreign markets."
But Obama said McCain was endorsing economic policies of the Bush administration that had led to the current problems.
"The American people are paying the price for the failed economic policies of the past eight years, and we can't afford four more years of more of the same," said his statement.
Neither candidate gave much in the way of specifics about the immediate action they are proposing.
McCain called for immediate tax relief for families, a plan to help those facing foreclosure, lower health care costs, investment in innovation, a move toward energy independence and opening more foreign markets to U.S. exports.
Obama proposed immediate relief with energy rebates for working families this summer, a fund to help families avoid foreclosure, extended benefits for the long-term jobless, and assistance to states that have been hard-hit by the economic downturn.
First Published: July 3, 2008: 8:38 AM EDT