Unemployment Rate Fell, 125,000 Jobs Cut In June

The Labor Department said Friday that U.S. employers cut 125,000 jobs in June, bringing the jobless rate to 9.5 percent — its lowest level in almost a year. The unemployment rate for May was 9.7 percent.

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MARY LOUISE KELLY, host:

A critical measure of the nation's economic health is just out this morning, and the news is disappointing. Private sector jobs increased by 83,000 last month, according to the Labor Department, but those gains were wiped out by census workers wrapping up their temporary jobs.

Here's President Obama's assessment this morning.

President BARACK OBAMA: Now, make no mistake, we are headed in the right direction. But as I was reminded on a trip to Racine, Wisconsin earlier this week, we're not headed there fast enough for a lot of Americans. We're not headed there fast enough for me either.

KELLY: NPR's labor correspondent Frank Langfitt is in the studio with us this morning. Now, Frank, the president was talking there about a town in Wisconsin where the unemployment rate is higher than the national average. What's the news on the unemployment picture nationwide from economists this morning?

FRANK LANGFITT: Well, they're pretty much agreeing with the president, that this is slow progress. We saw 83,000 jobs, an increase over - from - in the private sector. But overall, when you look at it, we lost 125,000, because all those layoffs of temporary census workers. And those kinds of numbers just really aren't enough to help the millions of people, most of the millions of people who are still out of work.

We need to be producing about 125,000 a month just to kind of keep up with population growth, new graduates coming in to the market, and keep the unemployment rate the same. So even though the labor market's growing, most -for most unemployed people, this really still feels like a jobless recovery.

KELLY: Well, put this in context, because we keep hearing the economy is recovering, we keep hearing it's been growing for months. Why is taking so long for hiring to pick up?

LANGFITT: A number of reasons, and they're all pretty logical. One thing is just uncertainty. You have these big government debt problems, let's say, over in Europe. Well, businesses here, they look around the global economy, they think about demand, they're not sure, you know, what the future is. Should they be hiring more people, unless they're clear there's going to be more demand, sustainable demand, for their products?

Another thing: health care. We have this new health care reform law. People don't know, businesses don't know what it's going to cost them. So as they go forward, they want to just be sure that there's really going to be demand before they make a full-time commitment to more staff.

KELLY: Let me step back and ask you for a minute, Frank, about the politics of this. Midterm elections, of course, coming up in November - what is the focus of politicians trying to work on this problem?

LANGFITT: Well, they're very concerned about it. One of the things that President Obama mentioned this morning was putting more of the stimulus money that's already been approved to create more jobs. He wants to extend unemployment benefits because so many people have been out of work for so long. And he wants more stimulus spending. But getting that through Congress is pretty tough.

Congress, for the most part, hasn't been going for this. People are concerned about the federal debt going forward, and people complain they don't want to see the government trying to continue to spend its way out of this problem. Now, right now, even with the unemployment rate at 9.5 percent, people feel that they don't want to see that debt go up any higher.

There's a Gallup poll last month that was really interesting. Nearly four in five people said the federal debt was either extremely or a very serious problem. And the only other issue that got that kind of response was terrorism.

KELLY: Hmm. Let me get back to the unemployment rate, which actually fell in June. How does that work, if the unemployment rate falls, if we actually lost jobs?

LANGFITT: Well, usually you know, you look at the unemployment rate, you see it go down - it's a number that ordinary people focus on a lot - it would look like good news. It actually probably isn't. The reason it went down is over 600,000 people stopped looking for work, so they're not counted.

Now, some of those may have been the kind of census workers we've been talking about, people who get laid off from those jobs. They're not all that engaged in the labor force to begin with. They're not sort of always looking for work. But others - those people no doubt are discouraged. There's intense competition for the very few jobs that are being created out there, and some of these folks have just given up searching. And that's kind of, in a lot of ways, where we are right now.

KELLY: Okay. NPR's Frank Langfitt, thanks so much.

LANGFITT: You're very welcome, Mary Louise.

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