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Latest U.S. jobs report spells no relief for flagging economy
Last Updated(Beijing Time):2012-07-07 11:13

The U.S. job market Friday fell dramatically short of creating enough jobs to jolt the economy back to life amid a moribund recovery from the worst recession in decades.

The economy added 80,000 jobs in June and the jobless rate remained flat at 8.2 percent. The number of jobless Americans remained unchanged at 12.7 million, with the long-term unemployed -- or those without a job for 27 weeks or longer -- standing at 5.4 million, according to U.S. Labor Department figures released Friday.

While the figures do not point to another recession like the 2007 downturn that sent the world economy reeling, the labor market is not seeing the kind of growth that will push down the jobless rate, said Heidi Shierholz, an economist and labor expert at the Economic Policy Institute (EPI).

"With the unemployment rate above 8 percent for 41 months straight, this is an ongoing, severe crisis for the American workforce," she said.

While private sector employment grew for the 28th consecutive month in June, the pace of growth was about half the average rate seen in the preceding 27 months, said Brookings Institution Senior Fellow in Economic Studies Gary Burtless.

Declines in government employment offset some of June's growth in private payrolls, so total employment rose by only 80,000. Since April, net job gains have averaged 75,000 a month, but growth between 90,000 and 100,000 jobs per month is needed to hold the unemployment rate steady, he said.

Current job market weakness is mainly explained by feeble employer demand for additional workers. But luckily, there is no evidence of a collapse in domestic or foreign demand that is forcing U.S. employers to dismiss their current workers, he added.

Shierholz and EPI's Research and Policy Director Josh Bivens said in a report that, while jobs fell much faster during the 2007 downturn than in the previous two U.S. recessions, current job growth was similar to that of the previous two recoveries. It is slightly lagging the rate of growth seen after the 1990-1991 recession and outpacing job growth following the 2001 recession.

Still, three years since the last downturn, unemployment was not stuck at levels anywhere near as high as today's 8.2 percent, they noted, adding that the length and severity of the 2007 recession explains the weak recovery.

Some surmise that Friday's weak jobs report might spur the U.S. Federal Reserve to launch a third round of quantitative easing.

"Chilled by global economic and domestic fiscal concerns, American businesses are no longer creating jobs fast enough to reduce the unemployment rate, suggesting the Fed -- like the Bank of England yesterday -- could launch QE3 in coming months," said Sal Gautieri, senior economist at BMO Capital Markets.

Friday's bad news offered no relief from the previous month's bleak report, when the jobless rate rose to 8.2 percent from April's 8.1 percent, triggering much chatter on the direction of the economy. Some economists forecast a downward trend while others said it was premature to make such a judgment.

Meanwhile, the clock is ticking as U.S. President Barack Obama tries to turn the economy around by the end of summer, analysts said.

Obama has until September to show voters that the economy has turned a corner amid the lead-up to November's elections. Otherwise, many will view the president as unable to boost employment, which could cost him dearly in an election in which jobs will overwhelmingly top voters' list of priorities.

Source:Xinhua 
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