Submitted By Todd on July 2nd at 11:23am
Stunning jobs numbers were released this morning, just as Democrats arrive home for the holiday recess having refused to come up with funding for the extension of unemployment insurance.
Employment fell for the first this year in June as thousands of temporary census jobs ended and private hiring grew less than expected, dealing a blow to President Barack Obama who has identified job creation as a key priority. Nonfarm payrolls dropped 125,000, the largest decline since October, as temporary census jobs fell 225,000, the Labor Department said on Friday. However the unemployment rate fell to 9.5 percent, the lowest level since July, as people left the labor force. The report will add to worries the recovery from the longest and deepest recession since the 1930s could be faltering. Analysts polled by Reuters had expected employment to fall 110,000 last month, with the jobless rate edging up to 9.8 percent from 9.7 percent in May. Private employment, considered a better measure of labor market health, rose 83,000 in June, less than market expectations for a 112,000 gain.The best storyline for the ruling party in a bad economy is to argue that things are improving. Where there is hope, there are votes.
The added problem for Obama is that time is running out to reverse the job losses ahead of the elections, and most economists believe the Democrats in Congress will be forced to run for re-election with relatively high unemployment still on the books come fall.It will be tough, heading toward November, for Democrats to brag about the great results from the stimulus... a program that provides much of the energy for the opposition Tea Party movement.
The negative jobs trend suggests that despite strong profits corporations are still wary of hiring many new workers because they are unsure if the U.S. economy can generate enough demand to buy the products and services new workers would produce.Bad news for Obama, though, is good news for the country, as his power is diminished.