US Employment Situation, July 2010 Results

Date: August 6, 2010

US Employment Situation, July 2010 Results

Source: United States Department of Labor, Bureau of Labor Statistics

Link to Release: http://www.bls.gov/news.release/pdf/empsit.pdf

Summary: The American economy shed 131,000 positions in July as temporary workers hired for the decennial census completed their work and were laid off. Private-sector employment edged up by 71,000. The manufacturing sector added 36,000 positions in July and health care created 27,000 jobs. Private sector gains were more than offset by the 202,000 federal government positions eliminated during the month. The unemployment rate remained unchanged at 9.5 per cent suggesting that the size of the labour force shrank as fewer people looked for work.

Analysis: The US labour market continued to disappoint in July. Before analyzing the results, however, it is important to remove the effect of the temporary Census jobs that resulted in a large positive spike earlier in the year, which is now balancing out. The real story (or issue) is the slow growth in private sector jobs, whether in goods production or the service sector. Growth in US private sector employment needs to be at least three times the July result to make a dent in the unemployment rate. Moving forward, the prospects for sustained private sector job growth have been clouded by slower than expected GDP growth and declining consumer confidence in the second quarter.

Source: Toronto Real Estate Board

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