The latest jobless numbers are out. Unemployment remains stuck at 9.5 percent — with employers shedding 131,000 jobs in July. Private sector employers added 71,000 (less than the private sector payroll additions in June); 143,000 Census workers were let go. The WSJ reports:
The jobless rate, which is calculated using a separate household survey, held steady at 9.5% in July. Economists were expecting it to edge higher to 9.6%.
After the worst recession in decades, the recovery that began in July 2009 has recently been losing momentum, but it’s hard to say if it’s just a temporary slowdown or if the economy could start to contract again. The Federal Reserve may consider taking steps to support the economy when officials meet next Tuesday. Some worry that with unemployment still so high and consumer prices recently dropping, the U.S. economy runs the risk of falling into a Japan-like deflationary trap of very slow growth and falling prices.
…in a sign of the labor market’s continued weakness, Friday’s report showed that 45% of unemployed Americans, or 6.6 million people, were out of work for more than six months in July. The longer someone is without a job, the harder it is to find work. With time, people lose skills — and employers are often loathe to hire someone who hasn’t been working for long periods.
More downward-revised numbers:
The June data was revised down significantly. Payrolls fell 221,000 that month, more than the 125,000 drop previously reported, as only 31,000 jobs were added in the private sector.
Taking into account revisions to prior months this year, the U.S. economy added an average of less than 100,000 jobs a month in the first seven months, a level that’s not strong enough to bring unemployment down.
The eve before the numbers came out, yet another Obama economic adviser is abandoning ship:
President Obama must grapple with the economy without another key adviser, given the departure of Christina Romer.
Romer, who chairs the Council of Economic Advisers, announced Thursday night that she is returning to her previous job as economics professor at the University of California at Berkeley.
Her resignation follows that of budget director Peter Orszag.
Rumors about who pushed her out:
…the scuttlebutt, apparently, is that she had run-ins with Larry Summers, who had a lot more access to The President.
There’s also gossip — completely unsubstantiated, we just know that people are chattering about this — that Summers wanted Romer out.
Meanwhile, back in Spain…
Spanish police have cleared off a stretch of beach for U.S. first lady Michelle Obama and daughter Sasha to relax by the Mediterranean after a busy day of sightseeing.
Police used palm trees Friday to mark off the boundaries of a 100-meter (100-yard) expanse for the American delegation. On either side, onlookers gawked.
As the first lady rested inside a canvas hut by the shore, her 9-year-old daughter splashed around in the sea and a security guard swam with her.