Hopeful Signs for U.S. Jobs

From the Wall St Journal | Aug 8, 2009

July Unemployment Rate Slips Unexpectedly to 9.4% as the Pace of Layoffs Slows

By SARA MURRAY

The
U.S. unemployment rate dropped in July to deliver the labor market's
best performance in a year, and while the decline was slight it was
enough to raise hopes that the economy is on the cusp of a recovery.

Nonfarm payrolls fell by 247,000 jobs in July, far fewer than the
443,000 shed in June, the Labor Department said. The jobless rate
slipped to 9.4% from 9.5% a month earlier -- the first decline since
April 2008.

"I
think it sends an encouraging message about where we're headed," said
Bruce Kasman, J.P. Morgan Chase & Co. chief economist. "This is an
economy that's improving...but not one that's delivering health."

A smaller loss of manufacturing jobs, and an increase in both
average hourly earnings and the workweek, were other encouraging signs.
But the decline in the jobless rate was primarily caused by people
dropping out of the labor force, and the rate is likely to rise again.

Still, some employers have moved into growth mode. ChannelAdvisor
Corp., a North Carolina-based technology company that helps retailers
sell online, is slowly adding employees. After shrinking its work force
to 240 workers from 320 before the recession began, it is looking to
add 25 by the end of the year.

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"We've
got a plan where we can kind of either accelerate that or continue it
into 2010," said company president and chief executive, Scot Wingo, "or
we can even pull back."

The Obama administration was upbeat but cautious. "Today we're
pointed in the right direction," President Barack Obama said. "As far
as I'm concerned, we will not have a true recovery as long as we're
losing jobs." White House spokesman Robert Gibbs said the president
expects unemployment to reach 10%, a view shared by many economists.
The highest rate on record since 1947, is 10.8%, reached at the end of
1982.

The jobs report sent stocks surging Friday. The Dow Jones Industrial
Average rose 1.2% to 9370.07, its highest level since November, while
130 stocks on the New York Stock Exchange hit 52-week highs.

In all, the economy has lost 6.7 million jobs since the recession began in December 2007.

Write to Sara Murray at sara.murray@wsj.com