Unemployment at 9.2 percent as jobs stall

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Contributing to the broad slump in the job market in June, the Labor Department said the average workweek also posted an unusual decline in June to 34.3 hours from 34.4 in May. And average hourly earnings were extremely depressed, ticking down by a penny to $22.99. Wages posted a gain of less than 2 percent in the last year.

Most of the increase in unemployment was among people who reported being out of work for only a short period of less than five weeks, the department said. The number of people out of work for six months or more was steady at 6.3 million.

“The economic recovery is simply not gaining steam,” said Peter Morici, business professor at the University of Maryland. He noted that unemployment would be even higher if millions of people had not grown discouraged and simply dropped out of the job market.

“Factoring in those discouraged workers and others working part-time but would prefer full-time employment, the unemployment rate is 16 percent,” he said. “Adding college graduates in low-skill positions like counter work at Starbucks, and the unemployment rate is closer to 20 percent.”

“Job creation remains weak,” he said, “because temporary tax cuts, stimulus spending and federal deficits do not address structural problems holding back dynamic growth.”

Mr. Morici blames chronic trade deficits with China with siphoning millions of jobs from the U.S. economy, while go-slow policies on developing oil, coal and gas resources also have held back employment, he said.

“Simply, dollars sent abroad to purchase oil and consumer goods from China do not return to purchase U.S. exports, and are lost purchasing power,” he said.

Many other analysts blame the economy’s doldrums on the jump in gasoline prices to $4 a gallon in May. But even though pump prices have retreated dramatically in the last month to about $3.50 a gallon on average, so far that has failed to jump-start consumer spending or overall jobs and economic growth.

— David Boyer contributed to this report.

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