The U.S. Department of Labor’s Bureau of Labor Statistics (BLS) released its monthly Employment Situation Summary for July earlier this month and there was little good news. The nation’s unemployment rate crept to 5.7 percent in July, the highest rate in four years. The degree to which the nation’s economy has slumped is evident in July’s figures that show the number of unemployed persons also rose, continuing an upward trend over the last 12 months.
Blacks continued to fare the worse among the unemployed. The unemployment rate for Blacks in July was 9.7 percent, compared to 5.1 percent for whites and Hispanics 7.4 percent. The rate for Asians was 4 percent. The unemployment rate for Black women was 7.5 percent and for men it was 10 percent. Among all groups, with the exception of teenagers, Black men fared worse last month; compared to white men at just 4.7 percent. Black teenagers, age 16 to 19 years old, saw their unemployment rate hike to 32 percent, up from the previous month and greater than white teens at 19 percent. For teenagers the number could reflect a tight summer labor market when companies are reluctant to do seasonal hiring.
One of the key monthly economic indicators is the number of people who are out of the labor force. These are people who have been seeking work and were available over the last 12 months. In July there were 1.6 million people who were “marginally” attached to the labor force, up 197,000 over the past 12 months. There were also “discouraged workers.” These are individuals who ceased looking for work because they believed there were no jobs available for them. Last month there were 461,000 of these workers, an increase of 94,000 over July 2007.
Another sign of the economic slowdown is the degree to which Americans seek part-time work as either their primary job or to supplement full time employment. In July the number of persons who sought part-time work increased by 308,000 to 5.7 million. Over the last 12 months the number has risen by 1.4 million.
Overall, the many sectors of the economy were affected by various degrees. Total nonfarm employment continued a downward trend in July. Employment in construction, manufacturing and certain service sector industries declined while there was improvement in health care and mining.
The manufacturing sector, beset by job losses over the last year, took another hit in July, shedding 35,000 jobs. The total 12 month loss for the sector is 383,000 jobs. Within the sector job losses were widespread but certain industries were hit harder than others, with declines in transportation equipment, textile mills and manufacturers of wood products.
Construction, another area hard hit in the current economy, faced another difficult month in July. Jobs in the sector were down 22,000 last month. A total of 557,000 jobs have been lost in construction since September 2006 when the sector peaked, with almost three-quarters of the loss coming since October 2007. The job losses in construction in July were primarily concentrated among specialty trade contractors in nonresidential and residential construction.
Professional and business services were also feeling the effects of the economy, losing 34,000 jobs for the month. Most of the decline, some 29,000 jobs, was in temporary employment services. Since the beginning of the year employment in temporary services has declined by 185,000. This is indicative of a slowdown in business activity as firms are less in need of hiring temporary workers to fill the gaps when permanent staff is overwhelmed or when new projects require additional help.
Retail trade’s numbers for last month were also weak. Jobs in the sector have decreased by 211,000 since its peak in March of last year. That sector was not alone. Even in sectors that many people regard as strong or perceived to be “immune,” the economy has been playing havoc with its companies. The information industry, perceived by most as perpetually flush with jobs and cash, was down by 13,000 jobs in July. The telecommunications industry declined by 5,000 jobs in July.
One sector that showed signs of life last month was health care. The health care sector has been the primary generator of jobs over the last 12 months as the needs of a wide cross section of Americans have to be attended to by medical professionals. And as Americans grow old and live longer, and new entrants arrive in the country our nation’s health care system is being tested and will require a different level of commitment from the health care industry. Employment in health care increased by 33,000 jobs in July with gains of 21,000 in ambulatory care and 10,000 in hospitals.
The Bureau of Labor Statistics will release its August numbers on Friday, September 5.