Obama Disappointed By Jobs Numbers

President Obama said Thursday he is "deeply concerned" about unemployment. The remarks to The Associated Press came after the Labor Department said U.S. businesses shed 467,000 jobs in June and that the unemployment rate increased to 9.5 percent.

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MELISSA BLOCK, host:

President Obama called today's jobs report sobering. But he said there are signs that declines in the job market are not as deep as they were earlier in the year.

NPR's Don Gonyea reports from the White House.

DON GONYEA: The president had just finished a meeting with executives from energy companies - companies that he says will be creating jobs with the help of a new energy bill that has passed the U.S. House, but still must get through the Senate. But even as he looked at those potential future jobs he addressed the latest report that shows how troubled the economy is today. The unemployment rate is now 9.5 percent - its highest in 26 years.

President BARACK OBAMA: We've taken some extraordinary measures to block the hard edges of the worst recession of our lifetime, and to offer assistance to those who have borne the brunt of this economic storm.

GONYEA: The president was referring to the $787 billion stimulus package enacted in February.

Pres. OBAMA: But as I've said from the moment that I walked into the door of this White House, it took years for us to get into this mess and it will take us more than a few months to turn it around.

GONYEA: But Republicans pounced on the jobs number saying it's proof that the stimulus is not working. They released a new YouTube video to coincide with the jobs report. It features a bloodhound who's out searching for the jobs.

(Soundbite of video)

Unidentified Man: We put the dogs on the money trail to find out.

(Soundbite of dog barks)

Unidentified Man: We went to AIG with a stimulus - meant big bonuses for big executives, but no new jobs. In Wisconsin, the stimulus paid for a bridge to bar called Rusty's Backwater Saloon. They've got great burgers but no new jobs.

GONYEA: White House Press Secretary Robert Gibbs took issue without saying the stimulus was helping to slow the pace of job loss. In the first quarter of this year, the economy lost an average 700,000 jobs per month. And in the most recent quarter the monthly losses averaged a far smaller 436,000.

Mr. ROBERT GIBBS (White House Press Secretary): I think there is a sense that the beginnings of stabilization are taking hold and hopefully the worst job loss is behind us.

GONYEA: But Gibbs still acknowledged the administration expects the unemployment rate to worsen, topping 10 percent in the coming months.

Don Gonyea, NPR News, the White House.

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Unemployment Up To 9.5 Percent, A 26-Year High

U.S. businesses shed 467,000 jobs in June and the national unemployment rate increased to 9.5 percent — the highest in nearly 26 years, the Labor Department said Thursday.

Job losses were widespread in all sectors of the economy, with big and small businesses laying off workers to stay afloat as the recession continues.

Services showed the sharpest drop, falling 244,000, but the pain was felt across the board, as manufacturing, retail and construction shed workers. In all, 14.7 million people were on the unemployment rolls in June.

"These job losses [are] much more severe than had been expected — the expectation being around 360,000 in job losses — so the economy is still very clearly struggling at best," said Hugh Johnson, chairman of New York-based Johnson Illington Advisors.

The construction sector cut 79,000 jobs last month, and professional and business services cut 118,000 positions — a huge increase over the 48,000 cut in May. The manufacturing sector lost 136,000 jobs, a slight improvement from the previous month when 156,000 jobs were cut.

The only bright spots in the report were education and health care, which posted gains of about 34,000.

Johnson attributed a large portion of the declines to the automobile plant closures by Chrysler and General Motors

"If we zero in on these numbers, I think we'll see a substantial part of the loss comes from the automobile sector where there were significant shutdowns at Chrysler and General Motors," he said.

President Obama said Thursday he is "deeply concerned" about the nation's rising unemployment rate but that the current economic situation was years in the making. During an interview with The Associated Press, the president said he is confident the economy will turn around.

White House spokesman Robert Gibbs said the administration expects the economy will continue to lose jobs in the months ahead, though he said there are indications that the economic stimulus plan is working. Gibbs said he expects the unemployment rate will rise to 10 percent over the next two to three months.

U.S. stocks fell sharply after the report was released, signaling that investors believe the Obama administration's stimulus hasn't yet kicked in.

"Clearly the economy is still in a recession. These are very, very weak numbers and are obviously going to be very disappointing to investors throughout the country," Johnson said.

Economists and the administration have said the unemployment rate could hit 10 percent as the U.S. struggles to come back from the worst downturn since the Great Depression.

The Labor Department also said the number of Americans filing new claims for unemployment benefits fell last week. The department said initial jobless claims dropped by 16,000 to 614,000 for the week ending June 27.

The number of people who continue to draw unemployment benefits dropped to 6.7 million.

Federal Reserve Chairman Ben Bernanke has predicted that the country will begin to pull out of the recession by the end of the year, though experts have warned that employment figures generally lag behind.

With reporting by NPR and The Associated Press

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