US Job Losses Increase in June

The U.S. economy shed 467,000 jobs in June, the Bureau of Labor Statistics reported this week — a sharper monthly loss than economists had hoped for, and evidence that the labor market’s brief signs of stabilizing the previous month hadn’t yet translated into a durable trend.

A Step Back After a Step Forward

BLS Commissioner Keith Hall delivered the figures in stark, unadorned language: “Nonfarm payroll employment continued to fall in June (-467,000), and the unemployment rate was little changed at 9.5 percent.” Since the recession officially began in December 2007, Hall noted, the economy had shed 6.5 million jobs total, and the unemployment rate had climbed 4.6 percentage points over that same stretch.

The losses were, as they had been for months, spread widely across the economy rather than concentrated in one struggling sector. Manufacturing alone shed 136,000 jobs in June. Construction, financial activities, information, wholesale trade, and retail all posted losses as well — together, manufacturing, construction, and professional and business services accounted for nearly three-quarters of every job lost since the recession began. One rare bright spot: health care added 21,000 jobs in June, continuing a pattern of resilience the sector had shown even as most of the rest of the economy contracted, though that month’s gain still ran below the sector’s average pace of hiring in 2008.

The Rate That Didn’t Move Much, and What That Actually Meant

Unlike the sharp, steady increases the unemployment rate had posted in six of the prior months — jumping by four or five tenths of a percentage point at a time — June’s rate barely budged, holding at 9.5 percent. On its face, that stability might read as good news. But economists parsing the report cautioned against reading too much into a flat headline rate paired with nearly half a million more job losses: a stalled unemployment rate can just as easily reflect discouraged workers leaving the labor force as it can reflect genuine improvement in hiring, and this report’s underlying details leaned toward the former explanation. The number of long-term unemployed — those out of work 27 weeks or more — jumped by 433,000 over the month to 4.4 million, meaning three in ten unemployed Americans had now been searching for work for more than half a year.

A Pattern That Would Define the Rest of 2009

June’s disappointing figure fit into a broader, choppier pattern that defined the labor market’s slow bottoming-out through the second half of the year. Job losses would continue moderating on average — running roughly 315,000 per month from July through October, according to later congressional tracking, down substantially from the roughly 645,000 average monthly losses recorded between November 2008 and April 2009 — but the improvement was neither linear nor especially reassuring in the moment. The unemployment rate itself continued climbing even as monthly job losses shrank, eventually crossing 10 percent for the first time in 26 years that October, driven in part by workers re-entering the labor force to search for jobs that, for many, still weren’t there.

For workers watching June’s numbers in real time, the report offered a frustrating kind of clarity: whatever stabilization economists thought they’d glimpsed in May’s slightly better figures hadn’t yet become a reliable trend, and wouldn’t for several more difficult months to come.

For related coverage of unemployment trends during this period, see our piece on July 2009’s better-than-expected jobs report, or browse our full Labor & Economy archive.