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Unemployment rate holds steady at 5.5 percent after jumping in May
By Jeannine Aversa
Associated Press
Published on Friday, Jul 04, 2008
WASHINGTON: The nation lost jobs for a sixth month in a row in June, with more than 60,000 affected.
Weighed down by energy prices and the housing crisis, employers laid off workers in stores, factories and building sites.
With more job cuts expected in coming months, there's growing concern that many people will pull back on their spending later this year when the bracing effect of the tax rebates fades.
In June alone, employers cut 62,000 jobs, bringing total losses so far this year close to a staggering half-million — 438,000, according to the Labor Department's report released Thursday. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.
The jobless rate held steady at 5.5 percent after jumping in May by the most in two decades. Still, June's jobless rate was considerably higher than the 4.6 percent of a year ago. The unemployment rate is expected to climb through the rest of this year and top 6 percent early next year.
Just in the past few days, Chrysler LLC said it would close a plant and Starbucks Corp. said it would shut about 600 stores in the next year, meaning more lost jobs ahead. American Airlines has said it might cut flight attendant jobs.
When companies do have openings, job hunters are in for more competition.
''I get resumes upon resumes upon resumes when I put up job postings,'' said Jeff Posner, president and owner of e-ventsreg.com, a small New Jersey firm that handles registration and check-ins for trade shows.
There were 8.5 million unemployed people as of June, up from 7 million a year earlier.
Heavy job losses were reported in construction, manufacturing and financial services — the worst casualties of the housing, credit and financial debacles. Cutbacks also came in retailing, temporary help, trucking, publishing and elsewhere. That more than swamped job gains in other places including health care, education, hotels, bars and restaurants and the government.
Other economic news revealed more weak spots.
• The number of newly laid off people signing up for unemployment insurance rose sharply last week. New applications jumped by 16,000 to 404,000, the highest level since late March.
• The nation's service sector — generally an engine for the economy — contracted in June. The Institute for Supply Management's index of the service sector fell to 48.2 in June from 51.7 in May. A reading below 50 signals activity is shrinking. A reading above that suggests activity is expanding.
''The economy will get worse before it gets better,'' said Sung Won Sohn, an economics professor at California State University.
With inflation concerns growing, the Federal Reserve last week ended an aggressive interest rate-cutting campaign, started last September to shore up economic growth.
WASHINGTON: The nation lost jobs for a sixth month in a row in June, with more than 60,000 affected.
Get the full article here.
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