WORLD> America
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WORLD> America
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US unemployment rate at 26-year high
(Agencies)
Updated: 2009-07-02 23:30 Professional and business services slashed 118,000 jobs, more than double the 48,000 cut in May. Manufacturers cut 136,000, down from 156,000. Construction companies got rid of 79,000 jobs, up from 48,000 the previous month. Retailers eliminated 21,000, up from 17,600. Financial activities cut 27,000, following 30,000 in May. The government cut 52,000 jobs, up from 10,000 the previous month. Leisure and hospitality cut 18,000 jobs, erasing a gain of the same size in May. One of the few industries adding jobs: education and health services. With the weakness in the job market, workers didn't see any wage gains in June. Average hourly earnings were flat at $18.53. The worst crises in the housing, credit and financial markets since the 1930s have plunged the country into the longest recession since World War II. Many think the jobless rate could rise as high as 10.7 percent by the second quarter of next year before it starts to make a slow descent. Some think the rate will top out at 11 percent. The post-World War II high was 10.8 percent at the end of 1982, when the country had suffered through a severe recession. Federal Reserve Chairman Ben Bernanke predicts the recession will end this year, with many economists forecasting that the economy will start to grow again as soon as the current July-September quarter. But recoveries after financial crises tend to be slow, which is why economists predict it will take years for the job market to return to normal. Some predict the nation's unemployment rate won't drop to 5 percent until 2013. An elevated unemployment rate could become a political liability for President Barack Obama when congressional elections are held next year. The last time the unemployment rate topped 10 percent, the party of the president -- then Ronald Reagan's GOP -- lost 26 House seats in midterm elections in 1982. So far, many people are saving -- rather than spending -- the extra money in their paychecks from Obama's tax cut, blunting its help in bracing the economy. Much of the economic benefit of Obama's increased government spending on big public works projects won't kick in until 2010, analysts say. The White House last week said federal money is being shoveled out of Washington quickly, but states aren't steering the cash to counties that need jobs the most. Large job cuts have continued this week. Newspaper publisher Gannett Co. said it plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue. Farm machinery company Deere & Co. said 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer.
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