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Biden 'we guessed wrong'

July 6 2009 at 12:45 PM


and lot's of other spin. But economists did not expect the continued job losses, either. Maybe, as many tried to say and were shouted down, the stimulus plan was more harm than good? Could McCain have been right in suspending the campaign to address the issues at hand? Can we ask Obama, when he comes back?

The Job Market's Grim Picture
Joshua Zumbrun, 07.02.09, 09:38 AM EDT
Unemployment flirts with an ugly truth--the possibility of hitting a new post-Depression high.

WASHINGTON -- Employment figures released Thursday morning by the Bureau of Labor Statistics report that the economy is taking a big step toward an ugly milestone.

In June, 467,000 jobs were eliminated, meaning 131.7 million people are working in the U.S.--fewer than in May 2000. If another 900,000 jobs disappear by the end of the year--likely, without unexpected improvement--an entire decade of employment gains will have been wiped out. In January of 2000, there were 130.8 million jobs in the country. "It's not that those jobs weren't needed," says Heidi Shierholz, an economist for the Economic Policy Institute. "The labor force has grown by nearly 13 million people."

Overall, the unemployment rate rose to 9.5% from 9.4% in June. That figure does not include so-called marginally attached and discouraged workers, who want jobs, but have given up searching at least temporarily. Including these workers, the rate rose to 10.8% from 10.6%. Including people who work part-time but want full time jobs, the broadest measure of underemployment in the economy, the rate rose to 16.5%.

The report was an unwelcome shock for forecasters. The consensus forecast expected 363,000 lost jobs, a miss of over 100,000. In May, only 322,000 jobs were lost, meaning job losses were considerably worse in June than in the prior month.

"On the whole, this was a very ugly labor market report, and there is no amount of lipstick that can improve its image," says Millan Mulraine, an economist for TD Securities, in a note reacting to the report. "Indeed, not only does it suggest that the pace of job losses in the U.S. remains very high, it bucks the trend of four consecutive months of improvement in the pace of job losses."

The losses were spread across the economy, with 136,000 jobs lost in manufacturing, 118,000 lost in professional and business services, 79,000 lost in construction. Even 52,000 jobs were lost in government, a sign that the stimulus package has been unable to plug the holes in local government budgets that are hemorrhaging from lost tax revenue.

The report is also a sign that the economy's "green shoots" have a way to go before things really start improving in the job market. Recent data "paint a picture of a gradually healing economy that is in the loosening grip of a major recession," says Stuart Hoffman, chief economist for PNC Bank. He pointed out that a major index measuring manufacturing in the U.S. improved for a sixth consecutive month; that the most-watched home price index showed that while home prices are still falling, they are doing so at a slowing pace; and that an index of pending home sales has been stable above its lows.

But economists' worst assumptions about employment are being surpassed monthly. In December, the Blue Chip consensus, a survey of many leading economic forecasters, pegged unemployment for 2009 at 7.8%. Even the 10 most pessimistic Blue Chip forecasters had an estimate of only 8.3%. By March, even the pessimists' estimates for the entire year had already been shredded, when unemployment reached 8.5%.

Economists were wondering whether unemployment could possibly reach 10%, says Shierholz. But 10% is all but certain at this point. The question has changed to: "Are we going to pass the peak in 1983 that was 10.8%?" says Shierholz, which would be the worst unemployment rate since the Great Depression. "I hope it doesn't happen," she says, "but it is a possibility."

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funny how they claimed it was McCain who didn't understand the economy

July 6 2009, 12:55 PM 

it's incredibly dishonest for these clowns to claim they inherited this economy

unemployment has risen, stocks have faltered, the dollar has declined in value, and tax receipts have dropped precisely because of actions taken and policies announced SINCE the inauguration

they took a tough situation and made it MUCH worse

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Biden made several interesting comments this weekend

July 6 2009, 3:00 PM 

In some cases Obama might not be too pleased with some of them, or possibly they give Obama "political distance" from something he actually wants to support, but wants to appear to not support for political reasons. Isreal bombing Iran, as a possible example of that.

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is that like voting 'present'

July 6 2009, 3:01 PM 

I'll support it, if it turns out good?

Where is Hillary?

Is there an Apology Czar, yet?

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and it's going to get worse

July 6 2009, 3:24 PM 

the states with higher minimum wages already have higher unemployment.... what does that say?

Higher minimum wage coming soon
Federal wage floor will rise to $7.25 an hour on July 24. Hike will be felt in 29 states. Can the job market handle it?
By Aaron Smith, staff writer
Last Updated: July 6, 2009: 2:56 PM ET

NEW YORK ( -- The federal minimum wage is set to increase later this month as the job market shows signs of further decay.

The federal minimum wage will go to $7.25 an hour on July 24 from its current level of $6.55, according to the U.S. Department of Labor.

The impact will be felt in 29 states, and many of them plan to match the federal minimum when it goes through.

Seven states already have laws mandating $7.25 minimum pay, while 14 states and Washington, D.C., exceed the new minimum. Employers are required to pay whichever is the highest: Federal or state.

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Would it make common sense to suspend this for a while?? (eom)

July 6 2009, 4:31 PM 

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