- The Washington Times - Friday, August 1, 2008

Unemployment last month jumped to 5.7 percent from 5.5 percent in June, continuing its sharp increase this year as the economy bleeds jobs, the Labor Department reported this morning.

Another 51,000 jobs were lost in manufacturing, construction, retailing, and temporary and wholesale employment, adding to a string of losses that total 463,000 since January. One area where job gains previously had held up — information technology — succumbed to the declining trend last month with the loss of 13,000 jobs. Only health care and government continued to see healthy job growth.

Manufacturing and construction have seen the worst job losses because of the deep slumps in housing and auto production. Construction jobs have plummeted by 557,000 since peaking nearly two years ago at the height of the housing boom, while manufacturing jobs have dropped by 383,000 in the last year despite a major boom in export sales, the department said.

In another sign of the economy’s weakness, the overall workweek also declined during the month, and the growth in average weekly wages dropped below 3 percent — suggesting that incomes during the month fell further behind the 5 percent rate of inflation.

“The details are rather ugly,” said Harm Bandholz, an economist with Unicredit Markets. “This is a truly recessionary employment report” because of the nearly across-the-board decline in jobs and incomes and the sharp rise in unemployment — a particularly alarming development that he said almost never occurs unless the economy is in recession.

While the decline of jobs has been steady all year at between 50,000 and 60,000 a month, it has not picked up speed as many on Wall Street feared might occur after the department reported a surge in jobless claims on Thursday.

Much of the dramatic increase in unemployment — which was below 5 percent at the beginning of the year — has been since the spring among teenagers, many of whom in past years shunned work to stay in school. The credit crunch has made it harder to get loans for college, and high gasoline prices are forcing many to seek income to supplement the family wage earners.

More than one in five teenagers reported being out of work last month, up from 16.8 percent at the beginning of the year.

But nearly every other category of worker also has seen smaller rises in joblessness, including adult men and women, and blacks. Only Hispanic workers enjoyed a drop in unemployment last month to 7.4 percent from a high of 7.7 percent in June.

The declining trend in jobs is one of four major factors that an academic committee in Boston considers in determining whether the United States is in a recession. The National Bureau of Economic Research has not as yet published an opinion on the matter, but many economists believe the relentless job losses will soon move it to declare that a recession began around the beginning of the year.

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