Jobless Rate Down, But Hiring Remains On Hold The nation's jobless rate took a surprise dip in July to 9.4 percent, the first drop since April 2008. But the economy is still losing jobs, and employers remain reluctant to bet the payroll that a full recovery is around the corner.
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Jobless Rate Down, But Hiring Remains On Hold

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Jobless Rate Down, But Hiring Remains On Hold

Jobless Rate Down, But Hiring Remains On Hold

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MADELINE BRAND, host:

From NPR News, this is ALL THINGS CONSIDERED. I'm Madeline Brand in California.

MELISSA BLOCK, host:

And I'm Melissa Block in Washington.

Today's employment report delivered a surprise. Everyone expected the jobless rate to rise for July, but it actually fell to 9.4 percent. Still, the economy did continue to lose jobs for the 19th month in a row. As NPR's Yuki Noguchi reports, the key question now is when employers will start hiring again.

YUKI NOGUCHI: Losing fewer jobs is a victory in the same sense that a sick patient sitting up in bed might be progress. It's not the same as full recovery. Tig Gilliam is chief executive of a staffing agency called Adecco.

Mr. TIG GILLIAM (Chief Executive, Adecco): This is a very good jobs report, given where we are in the cycle, but we're still losing 250,000 jobs a month. The other thing we need to remember in the U.S. economy is we need to add about a 100,000 jobs a month just to stay steady.

NOGUCHI: Gilliam says the Labor Department report doesn't radically change his outlook. For one thing, many workers have been sitting out the recession and aren't counted among the unemployed. So, when they resume looking for jobs, the unemployment rate could actually worsen. Secondly, he says, many workers have been furloughed or have had to go part time, which means many businesses might not have to start hiring for some time, even after demand improves. And that's why, in so many respects, it's hard to plan for the future. One microcosmic example of this might be the shipping industry. It's long been considered a bellwether for the economy.

Mr. JESS BUNN (Spokesman, FedEx): We think we have one of the best seats in the house in terms of observing the economy and seeing what is happening and what will happen.

NOGUCHI: FedEx spokesman Jess Bunn says the company has had to lay off a 1,000 people, institute a hiring freeze and reduce employees' work hours earlier this year. FedEx executives have since declared the worst of the recession over, but Bunn says that doesn't mean they know when they might start hiring again.

Mr. BUNN: It's very hard to say, because there's still a great deal of volatility in the global economy. That makes our crystal ball kind of cloudy.

NOGUCHI: Bunn says the first thing the company is likely to do is reinstate lost work hours. It's a similar story with UPS. The brown truck delivery folks pared back their work force by 15,000 people in the last year. UPS spokesman Norman Black.

Mr. NORMAN BLACK (Spokesman, UPS): Just in the second quarter alone, we were delivering 700,000 fewer packages every day.

NOGUCHI: UPS can reassign idle drivers to sort packages when volumes falls, which gives the company some flexibility. So far, Black says, UPS doesn't foresee when it will hire again. With fewer boxes to ship, there is also less demand for the boxes themselves, and that's trickled down to Ron Cowell's level. Cowell owns a seven-person operation called T-Roc Equipment in Kansas City. T-Roc makes the machines that manufacture custom-size boxes, a niche that has also been hurt by the recession.

Mr. RON COWELL (Owner, T-Roc Equipment): It has sort of stagnated my business. We're staying on a steady, even keel right now, but we were growing every year.

NOGUCHI: His machines cost between $50,000 and $100,000, but Cowell says few customers can get the credit to finance a purchase. So, T-Roc has turned to refurbishing older machines just to keep everyone busy. He's also cut his own salary so he won't have to lay off any employees.

Mr. COWELL: I'm planning on hiring as soon as I get the orders. But if the orders don't come, I can't hire. It may happen next week. It may never happen, or it may happen in six months. It just depends on, as you're looking at the overall economy, where's it going. And despite today's optimistic jobs report, no one's confident enough to bet the payroll.

Yuki Noguchi, NPR News, Washington.

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