BH: Analyst: U.S. economy seeing dramatic slowdown
Employers still aren’t hiring enough to spur the economy, according to the Labor Department’s latest look at the jobs picture.
The national unemployment rate for July was stuck at 9.5 percent for the second straight month and private employers reported a net gain of only 71,000 jobs, the third straight month of cautious hiring.
“It’s just one more indication the U.S. economy is slowing dramatically,” said Nariman Behravesh, chief economist at Lexington’s IHS Global Insight. “We don’t think we’re in a double-dip (recession) situation, but we do think we’re seeing very weak growth and any progress on reducing unemployment will be glacial.”
The July job gains were far below the 200,000 it takes for the unemployment rate just to hold steady and keep pace with the growing work force.
Counting the jobs that were lost at the local, state and federal levels in July, the net gain was only 12,000 jobs. And on top of that, 143,000 temporary jobs with the Census Bureau for the 10-year population count came to an end.
“They’re disappointing numbers,” said Andre Mayer, senior vice president of research at Associated Industries of Massachusetts, the state’s main trade group for private employers.
“We are very much in a jobless recovery nationally,” he added, “and that’s a big problem because we weren’t seeing terribly strong job growth even before the recession.”
Economists are especially concerned that the recovery is losing momentum as it enters the second half of this year, when the benefits of most of the government’s stimulus spending will start to wear off.
For now, most of them are betting the economy will continue to grow, though at a lackluster pace, through the rest of this year. Some analysts fear the recovery could fizzle altogether, though.
“If we don’t see significant job growth by the end of the year, the economy could be in serious trouble,” said Bill Cheney, chief economist at John Hancock Financial Services in Boston.
Massachusetts’ unemployment rate was 9 percent in June. The July report is due Aug. 19.