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August 6th, 2010
Unemployment Rates are The Polar Opposite of Obama's Approval Rating

U.S. employment fell for a second straight month in July as more temporary census jobs ended while private hiring rose less than expected, pointing to an anemic economic recovery.

Non-farm payrolls fell 131,000 the Labor Department said on Friday as temporary jobs to conduct the decennial census dropped by 143,000.

Private employment, considered a better gauge of labor market health, rose 71,000 after increasing 31,000 in June. In addition, the government revised payrolls for May and June to show 97,000 fewer jobs than previously reported.

Analysts polled by Reuters had forecast overall employment falling 65,000 and private-sector hiring increasing 90,000.

The unemployment rate was unchanged at 9.5 percent in July for a second straight month, just below market expectations for a rise to 9.6 percent. The steady jobless rate largely reflected a drop in the labor force as discouraged workers gave up the search for jobs.

Job growth has taken a step back after fairly strong gains between February and April, putting in jeopardy the economy's recovery from its worst downturn since the 1930s.

Growing unease over the health of the economy is weighing on President Barack Obama's popularity and hurting the Democratic Party's prospects of keeping control of Congress in November's mid-term elections.

The state of the labor market is one of the factors that will determine the timing of the Federal Reserve's first interest rate rise since reducing overnight lending rates to near zero in December 2008.

Fed Chairman Ben Bernanke has said the U.S. central bank could take steps to further ease monetary policy if the recovery were to falter. The central bank holds its next policy-setting meeting on Tuesday.

Economic growth slowed to a 2.4 percent annual rate in the second quarter after expanding at a 3.7 percent pace in the first three months of this year.

Despite the tepid private sector jobs growth, the pace of layoffs has moderated significantly from the first quarter of last year, when employers were culling an average of 752,000 jobs a month.

Last month, the dominant service sector added 38,000 jobs after June's 34,000 gain. More disturbing, temporary help services, seen as a harbinger of future permanent hiring, fell 5,600 after increasing 11,200.

State and local governments, struggling with huge budget deficits, purged more workers last month, pushing government payrolls down by 202,000 compared to a 252,000 drop in June.

Payrolls in the goods-producing sector unexpectedly rose in July, reversing the prior month's decline as manufacturing employment was boosted by auto makers who did not shut down their plants in July for retooling. Manufacturing jobs increased 36,000 after gaining 13,000 in June.

The sector is leading the economic recovery, which started in the second half of 2009. However, construction employment fell 11,000.

The average workweek edged up to 34.2 hours after slipping to 34.1 hours in June.

Employers normally increase working hours for existing staff before hiring additional workers. 

(NBC)


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