Economy Sends Mixed Signals On Recovery
MELISSA BLOCK, host:
From NPR News, this is ALL THINGS CONSIDERED. I'm Melissa Block.
ROBERT SIEGEL, host:
And I'm Robert Siegel.
It wasn't exactly good, but it was less bad. U.S. employers shed 345,000 jobs in May. The pace of layoffs slowed significantly. And that statistic may be a sign that the worst is over for the economy.
BLOCK: That optimism is also an indication of how serious the downturn is. In normal times, these numbers would be considered terrible. And, indeed, the unemployment rate jumped to its highest point in more than 25 years: 9.4 percent.
NPR's Jim Zarroli reports on how we can read the numbers released today.
JIM ZARROLI: The report to fix an economy in which jobs keep growing scarcer. Manufacturing lost more than 150,000 jobs, construction was down sharply. These are sectors that tend to employ a lot of men, so the adult male unemployment rate hit 10.5 percent. The U.S. economy has now lost six million jobs since the recession began a year and a half ago. Vice President Joe Biden spoke about the unemployment problem this morning.
Vice President JOE BIDEN: Behind every one of these job losses is a family, a individual who - a community that's trying to make it through the deepest recession in a decade, and are hurt.
ZARROLI: And the fine print in the report was even more discouraging. People are also working less than they used to. The length of the average work week fell to a little more than 33 hours - the lowest level since 1964. And the number of part-time workers who'd really like to find full-time work is rising. All of this suggests a labor market that remains anemic. People have trouble finding jobs, and they're often overqualified for the jobs they do find.
Heidi Shierholz is an economist at the Economic Policy Institute.
Dr. HEIDI SHIERHOLZ (Economist, Economic Policy Institute): We have a quote, unquote, "underemployment rate" of 16.4 percent. That's nearly one in six workers in the U.S. is either unemployed or underemployed. The state of the labor market, it's a real crisis right now.
ZARROLI: And Shierholz says the report contains some other disturbing news. She says that during the first year of the current recession, workers' wages tended to do pretty well. Now that's changed.
Dr. SHIERHOLZ: This year, wage growth has completely collapsed. It's now growing at about a third the rate as it was last year. Even people who are keeping their jobs during this recession are really feeling the effects of the downturn.
ZARROLI: Still, Shierholz says, there was some reason for optimism in the report. Over the past half a year, the economy has shed, on average, 600,000 jobs a month. Not only were job losses smaller than that last month, but the Labor Department said March and April losses were lower than first thought. Economist Joel Naroff says the slowdown in job losses is a positive sign.
Dr. JOEL NAROFF (Economist): While this report doesn't tell us that the recession is over, it tells us we're getting to that point where the bottom is in sight.
ZARROLI: Naroff pointed out that unemployment is a lagging indicator. Employers don't start hiring until they're really sure the economy has turned a corner. So the unemployment rate isn't going to start falling anytime soon.
Dr. NAROFF: It is going to rise till the end of, more than likely, till the end of this year. But job losses will slow, and as those job losses slow, it tells us that businesses are changing their perspective and the economy is indeed stabilizing.
ZARROLI: All that suggests that for the first time in months, the freefall in U.S. payrolls is over. And the day when businesses will start hiring again, no longer seems so far away. Still, the U.S. labor market has taken a beating and it will be a long time before it can climb out of the hole it's fallen into.
Jim Zarroli, NPR News, New York.