More Jobs Lost in June than Expected

More Jobs Lost in June than Expected


If we’re headed towards economic recovery, the path is unlikely to be a smooth one. At least that’s what June’s unemployment numbers indicate as the nation lost 467,000 jobs, more than 100,000 above estimates.

With unemployment now at 9.5%, a 26 year high, most economists foresee double-digit unemployment before the end of the year with numbers continuing to rise into 2010 before beginning to creep back down. Of course, when you figure in all those who’ve given up looking for a job and those who’ve had to settle for low-paying part-time jobs, the real unemployment rate is closer to 16.5%.

That’s a lot of unemployment for the economy to absorb. Given that some jobs aren’t coming back (automotive for instance) and others will have to come back from new sources (Linens n’ Things, Circuit City, etc.), there is no reason to think any recovery will be quick or easy. I suspect economists will be regularly confounded and estimates will be regularly wrong.

The hope is that, all-and-all, the economy trends upwards. We can handle a few bumps, I’m not sure we’d fare well under a long depression.

  • Trescml

    The economy is weak and from a job perspective the improvement in 2010 is likely to be fairly tepid. Of course whenever we finally get serious about the budget deficit (assuming that day comes), the economy will need to be strong to absorb that impact.

  • kranky kritter

    Oh, I’m sure another 2 to 4 years of the government spending 13 or 14 dollars for every 10 it collects will have nothing but positive effects.

    The rest of the world will probably be eager to continue to accept the grossly inflated supply of dollars without the dollar’s value continuing its long slide.

    I would make no troubling conclusions from the fact that television is now littered with commercials asking people to mail them their “junk gold” for a “fair price.”

    We live in the best of all possible worlds. Serenity now. I will gladly give you a California IOU Tuesday for a hamburger today.

  • gerryf

    Wow, another jobless recovery? This is what the policies of the last 30+ years have wrought. “Free” trade and coporate tax policies that mask the reason behind them–make it cheaper for corporations to ship jobs overseas.

    Recessions have become a necessary componant in the corporate playbook–they are excuses to shed jobs.

    Yep, we get a lot of things cheaper, but no one will have any money to buy them and the standard of living just keeps falling.

  • kranky kritter

    Gerry, I’m curious. What policies do you imagine would preserve domestic jobs?

    What’s the motivation for any corporation to HQ and operate here in America unless the nature of their industry practically dictates it?

    And, as native America businesses become progressively more foreign owned, what motive do they have NOT to respond to unfavorable policy changes with some sort of flight.

    For the sake of this discussion, I will cheerfully stipulate the utter wrongness of all GOP policies that you believe contributed to the fix our nation is now in. So please try to answer the above questions without detouring into any rants about that.

    Just tell us what you think the gov’t should do now. Be specific.

  • Simon

    Kind of throws a different light on this, doesn’t it?

  • gerryf


    I did not say GOP policies.

    I simply would like the US to practice the same policies that other nations practice when protecting their homegrown businesses. It matters not a lick to me if a company is foreign or local owned — a corporation is not a citizen and has not obligation to its country of origin or ownership.

    As such, government ought to be looking out for the interests of itself and the interests of its citizens.

    Does that sound like protectionism? You betcha, and I do not apologize for that. The US practices one-way free trade while the rest of the world bars or limits our products from being sold their.

    Why wouldn’t a corporation build in another land when they can ship to the US for nothing, employ workers at 1/10 or less than what it costs to employ a worker here?

    China fixes its currency, dumps products for below cost, limits the number of products that can be sold, imposes tarriffs, has state healthcare so as to not burden its businesses.

    It’s a start.

  • Mike A

    I will go back to a point from a previous post:

    S. Korea is a modern, industrialized nation with very high costs of living (comparable to the more expensive areas of the US). Yet they successfully design, develop and build many of their products internally (Samsung, LG, Hyundai) and are successful in exporting these goods around the world. This country possesses very little natural resources, thereby requiring substantial imports to sustain any manufacturing (including energy), yet they run trade surpluses. Exports are the true revenue for their economy. Nothing dictates that Samsung TV’s , LG cell phones or Hyundai cars need to be manufactured in S. Korea. In fact you could argue they shouldn’t be manufacturing anything there..yet they are.

    Of course Samsung, LG, etc all have factories in China running full steam, typically on the mature products that have low-margins. The point is they have a model which appears to successfully balance onshore and offshore manufacturing in an economy that relies on it’s manufactured exports for survival.

    To gerryf’s point – there are a few modern nations that appear to have figured out how to keep it’s citizens employed while maintaining a strong manufacturing arm. It seems the US sits around with the attitude that it’s not possible.

  • kranky kritter

    In principle, I support a “tit for tat” approach. If our trade policies are reciprocal with those of our trading partners, there’s a certain fairness to that. So I don’t dispute your point.

    But if changes can’t be made without an overall increase in protectionism, that will be bad for everyone’s economies. In other words, maybe better to decrease the practice in others than to increase it ourselves. Then again, in any fairly refereed trade, our labor costs are higher than most of our competitors.

  • ExiledIndependent

    With labor costs higher, we need to innovate (new products that the rest of the world needs) and produce products that require skilled labor. We need to make the tax code in the US attractive to house businesses here, from a legal standpoint. As I’ve stated numerous times, I’d love to see an alternative energy Manhattan Project that results in a viable non-fossil fuel source, with the technology and revenues staying in the U.S.

    Any sort of manufacturing process is going to migrate to the cheapest labor pool available. I wonder how much more expensive a Chevy would be if it were made entirely here in the US? Anyone have any data on that?

    And how much manufacturing infrastructure could be built for $800 billion?

    Random thoughts as we realistically look at 10% unemployment by Christmas….

  • gerryf

    I agree–if you can convince our trade partners to play by the same rules, then that’s one thing, but its pretty clear that’s not the case.

    And you’re right, to some degree, that our labor costs are higher per worker than some other countries, however our productivity is also higher.

    My point is, that we have created our system to benefit the corporations in a continued nod to the ideas of trickle down economics.

  • Mike A

    EI says “Any sort of manufacturing process is going to migrate to the cheapest labor pool available.”

    I would not agree. Are Mercedes Benz, Lexus’, Infiniti’s manufactured in China? Commodity and low margin products migrate to the cheapest labor pool available. Advanced and high end products typically command higher margins. Roll out new products in the US, then migrate to low labor as they mature. It’s a manufacturing product/supply chain strategy.

  • ExiledIndependent

    Gerry, could you define your understanding of trickle-down economics?

    Also, do you agree or disagree with the concept that the more businesses mean more jobs? From what I’m reading, it seems like you actually are in favor of the spirit of “trickle down,” but don’t agree with the way that it has simply favored large corporations from an accounting perspective (they make money, but the jobs are created overseas).

    Frankly, if we did more to encourage the creation of small- to mid-size businesses, that would have a positive impact on things. And incentivize (not penalize) to keep jobs in-country.

    But doesn’t that fly in the face of Obama’s “global citizen” mindset?

  • Mike A

    gerryf says “And you’re right, to some degree, that our labor costs are higher per worker than some other countries, however our productivity is also higher.”

    Yes I agree with this statement and it’s true in the confines of our current system. One reason our average costs are higher is teh US does not have access to a low-cost labor pool. Take the Philippines for example. I don’t have the stats, but I would not be surprised if the Philippines greatest export are it’s people as low-cost labor for surrounding nations. If you walk into factories in Japan, Taiwan, S. Korea you see Philippinos doing the low-end jobs. They come in under work visas, work 6 months, get paid, then go home. There are no (significant) illegal alien issues. The system works.

    So, what’s the US’s low-cost labor system?

  • Mike A

    sorry…filipino, not Philippino

  • Mike A

    EI says “Frankly, if we did more to encourage the creation of small- to mid-size businesses, that would have a positive impact on things. And incentivize (not penalize) to keep jobs in-country.

    But doesn’t that fly in the face of Obama’s “global citizen” mindset?”

    No – strategic needs come first. Global mindset comes after. Just because someone believes in both does not dictate equal priorities.