Jobs cut for 6th straight month; more ahead

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BY KEVIN G. HALL/McClatchy Newspapers

WASHINGTON — The economy is likely to keep stumbling at least through the rest of the year, analysts agreed Thursday, after a disappointing government report showed that payroll jobs fell by 62,000 in June, the sixth straight month of job losses.

“More job losses are coming through the remainder of the year. The economy has lost just over 400,000 jobs since the start of the year and will lose another 400,000 by year’s end,” said Mark Zandi, chief economist for forecaster Moody’s Economy.com. “Behind this pessimism are the broad-based job declines across most industries and regions of the country.”

The Labor Department said Thursday that the unemployment rate held steady at 5.5 percent in June despite the 62,000 lost payroll jobs. Still, that confirmed that May’s unusual half-point jump in the jobless rate wasn’t an aberration as first thought.

“We had thought that the rate had temporarily overshot in May based on problems seasonally adjusting the summer inflow of students into the work force,” Nigel Gault, the chief U.S. economist for forecaster Global Insight in Lexington, Mass., said in a research note to investors. “But the unemployment rate for young workers was little changed this month, suggesting that they are simply facing a much weaker labor market than in previous years.”

The manufacturing, construction, financial and retail sectors led the job losers, while government and health care continued to add jobs. This is a continuing pattern and a chief reason that forecasters see more job losses ahead.

“Job losses are occurring in over half the nation’s states, with large declines in big states such as California, Florida, Michigan and Ohio,” Zandi said. “There is nothing in today’s jobs report that suggests the job market will stabilize anytime soon.”

The picture is better in Nebraska, though, as the state Department of Labor reported earlier this week that both the state and the Lincoln metropolitan area continue to add jobs.

Although June’s employment losses were slightly worse than expected, they were below the number associated with economic recessions.

“Obviously, we’re disappointed. We don’t like to see jobs lost,” Commerce Secretary Carlos Gutierrez told McClatchy Newspapers. “It is important, however, to put it in perspective. During the mild recession of 2001, we were losing 180,000 (jobs) per month. No one is insinuating that there is positive news here, (but) it’s important to keep it in perspective.”

Gutierrez expects a rebound later this year.

“The consensus out there continues to be as we head into the back half (of 2008), the back half will be less difficult than the first half,” he said, adding that government rebate checks are helping to boost consumption. “The whole idea with the stimulus package is to buy some time, to serve as a bridge.”

Wall Street shrugged off the bad news. In a trading day shortened by the Fourth of July holiday, the Dow Jones Industrial Average closed up 73.03 points to 11,288.54. The S&P 500 finished up 1.38 to 1262.90 and the Nasdaq dipped 6.08 points to 2245.38.

Presidential candidates Barack Obama and John McCain seized on Thursday’s numbers to tout their economic platforms.

“To get our economy back on track, we must enact a jobs-first economic plan that supports job creation, provide immediate tax relief for families, enact a plan to help those facing foreclosure, lower health-care costs, invest in innovation, move toward strategic energy independence and open more foreign markets to our goods,” McCain said in a statement.

Obama pinned the job losses on what he labels a Bush-McCain downturn.

“Our economy has now shed 438,000 jobs over the past six months, while workers’ wages fail to keep pace with the skyrocketing cost of gas, groceries and health care,” he said in a statement. “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.”