Despite The Numbers, Jobs In Short Supply

The unemployment rate fell in June to 9.5 percent, but nobody is saying good things about this. The small decline happened because so many people left the work force and the number of jobs on business and government payrolls declined by 125,000.

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This is WEEKEND EDITION from NPR News. I'm Scott Simon.

Not much to celebrate of(ph) the jobs report released yesterday. The unemployment rate did fall two-tenths of a percent, to 9.5 percent, but that was mostly because of the large number of people who apparently have given up on finding jobs. People who aren't hunting for a job are not considered to be unemployed statistically. As NPR's Yuki Noguchi reports at this point, many people are starting to worry about the slow pace of hiring.

YUKI NOGUCHI: Working for the 2010 census provided Steven Vito(ph) with two months of much needed employment.

Mr. STEVEN VITO: If it wasn't for the census, I honestly don't know what I would've done. I mean, I really don't.

NOGUCHI: But that gig wound down. Now the 29-year-old Vito is unemployed, along with 225,000 other temporary census workers whose jobs ended last month.

Mr. VITO: I was managing a crew of about 10 people and I laid off all but two.

NOGUCHI: He says he was surprised at the education level of his census colleagues and that they too had been out of work.

Mr. VITO: I had two attorneys. I was managing two attorneys. Some people were managing doctors. It was kind of weird.

NOGUCHI: Unlike many of his former colleagues, Vito is not looking for replacement work. He's headed to business school in the fall, so the government doesn't consider him unemployed.

If the dip in temporary jobs were the only worry for the country's jobless picture, things might not look so bleak. But economist Heidi Sherholz says there's lots of other factors in yesterday's report causing concerns.

Ms. HEIDI SHERHOLZ (Economic Policy Institute): We saw a decline in hours for people who have jobs and we saw a decline in paychecks. There was a decline in hourly wages and a serious decline in weekly wages. This labor market is not picking up anytime soon.

NOGUCHI: Sherholz is with the Economic Policy Institute. She says business hiring was supposed to pick up but has not. With fewer job prospects and less for consumers to spend, there's less demand for business goods and services.

Ms. SHERHOLZ: Another ongoing threat to the economic recovery is the fact that state and local budgets are really crunched right now.

NOGUCHI: Earlier this week, to take one example, New York City approved a budget that would eliminate more than 5,000 jobs. Last month, 10,000 state and local government jobs were lost. Sherholz says that could get worse in coming months, especially if the federal government does not approve emergency aid to the states.

Until now, in fact, the government has been throwing money at the problem. To help those who were unemployed for a long time, the federal government extended jobless benefits. That is in addition to the six months of unemployment insurance states pay for.

But now money for that is running out. Senate Republicans have repeatedly blocked attempts to extend benefits again, citing concerns about the deficit. That stalemate means millions more people could soon lose their support.

Mr. NIGEL GAULT (IHS Global Insight): I believe it should be done. I think the government needs to keep doing what it can to support growth, because the private sector of the economy still looks pretty weak.

NOGUCHI: Nigel Gault is chief U.S. economist for IHS Global Insight. He says he was among those who thought the huge stimulus last year would've helped jumpstart the business sector by now.

Mr. GAULT: We thought we'd see better news at this point. And it did look during the first quarter like things were getting better. The private jobs accelerated, and we simply lost momentum.

NOGUCHI: Now most economists are worried that consumers will grow cautious again. Gault says the expiration of other incentives for buying a first home or energy efficient appliances will also create a dip in spending. Right now he says it's hard to see where the economy might get a lift, but Gault says he still expects that the latter part of the year will bring better news for workers as the housing sector recovers.

Yuki Noguchi, NPR News, Washington.

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