Labor Department: Jobless Rate Eases In July
LINDA WERTHEIMER, host:
Good news on the employment front this morning. The U.S. job market lost 247,000 physicians last month, according to the Labor Department. That may sound like a lot, but it's the smallest drop in jobs in a year. And the unemployment rate dropped slightly to 9.4 percent. Frank Langfitt, NPR's Labor Correspondent, is in the studio with us to explain all this.
So, Frank, put it context. What does it mean?
FRANK LANGFITT: This really is very good news, and it's probably one of the most encouraging labor reports that any of us have seen in a long time. And it suggests that we're a lot closer to the end of the recession. One economist I talked to this morning said he thought the recession may have already ended, and some analysts are even predicting growth in the third quarter. Now, it's way too early to say anything like that definitively, and we won't know for a long time. But this looks a lot better than what we've been seeing.
Let's put it in a little context, as you said. We've been losing jobs for a long time. And losing jobs is never a happy thing, but it's a lot better than what we've been seeing. Take it back in January. The economy shrank by over 700,000 jobs. Now it's down to about a quarter of a million in July. And so it's clearly following a trend.
WERTHEIMER: So, does that mean that we'll see - it'll trend in the other direction, and job losses will be over?
LANGFITT: No, not at all. We're still going to see more layoffs, but probably fewer mass firings. We actually haven't - probably won't see the labor market begin to grow until maybe next year. Jobs, as you know, they're a lagging economic indicator. And that means they follow the economic trends, but they don't really lead them. So even after the recession ends, for a lot of people who are unemployed, it's still going to feel pretty bad because it's going to be hard to find work out there.
WERTHEIMER: The headline figures on this jobs report are pretty good. Is there something buried down deep in the fine print that you're seeing that's cause for concern?
LANGFITT: Absolutely. For one thing, employees - employers aren't laying off as much, but they're also not creating as many jobs. I was just looking - the most recent data we have is for May. The economy created 1.5 million fewer jobs this May than they did the same time a year ago. Businesses, understandably, they're very nervous about their - this recovery. They're reluctant to do a lot of hiring. And for workers, this kind of creates a brutal game of musical chairs. More people are losing jobs every month, and they're competing for an increasingly smaller pool of openings. Also, as you look in the report, you see that more people are staying unemployed longer.
WERTHEIMER: If there should be a turnaround in hiring, what would it look like? I mean, if we're looking at - we're looking for signs, what would we look for?
LANGFITT: A great place to go is temp services. This is sort of traditionally been the canary in the coal mine. Going into a recession, businesses cut temps first. Coming out, they start to hire temps to meet rising demand. So in the July report, we still see that temp hiring is down nearly 10,000. And that fits a lot with what I've been hearing. Earlier this week, I talked to a woman named Cathy Paige. She oversees the Northeastern U.S. firm Manpower, the giant temp services firm. And Cathy said in the last couple of weeks, they've gotten requests for workers from cosmetic companies and pharmaceuticals, but the numbers are pretty small. And here's how she put it.
Ms. CATHY PAIGE (Manpower): There is sort of a general feeling of optimism from the client, saying everything we see from our salesmen and from what we're observing is that we're about to get some big orders. But nothing has actually come to fruition yet to make a big change in what we're seeing.
LANGFITT: So before we really start to see strong hiring, we're going to have to see temp services begin to pick up.
WERTHEIMER: Temp services turn - I mean, just sort of move into�
LANGFITT: Positive territory. I mean, along the way, what we're kind of trying to get to here in general in the labor market is zero job losses. We're not there, yet. We have to get to zero, and then begin to build. And before we hit that zero mark, we're going to see temp services have to pick up.
WERTHEIMER: Thanks very much, Frank.
LANGFITT: Happy to do it, Linda.
WERTHEIMER: NPR's labor correspondent, Frank Langfitt.
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