Two bright spots over the past few months — manufacturing and job creation by private companies — both slowed in May, according to new reports this week. The data come amid other reports of falling home prices, declining auto sales, weaker consumer spending and a rising pace of layoffs.
Instead of accelerating, the U.S. economy is puttering along at a growth rate of 2 to 3 percent — barely enough to bring down joblessness, if at all.
Despite the talk of economic recovery, it seems that not enough jobs are being created to bring down the unemployment numbers.
On Thursday the Labor Department reported that fewer Americans applied for unemployment benefits last week, falling by 6,000 to 422,000.
But that level is still too high to sustain job creation, which slowed sharply last month at private businesses, according to ADP, the payroll processing company. Firms added 38,000 jobs, ADP estimated, compared with 179,000 jobs added in April.
On Friday, the Labor Department will release its report on May job growth and the unemployment rate. Economists expect that about 180,000 jobs were created last month, dropping from 244,000 in April, and that the unemployment rate has edged down to 8.9 percent from 9 percent.
This doesn't begin to employ the numbers of already unemployed, never mind the new college grads and the about to be unemployed.
Speaking of the about to be unemployed:
The government and non-profit sector continues to dominate monthly job-cut announcements, the firm's monthly report said.
Government and non-profits firms announced 14,755 layoffs in May, about 40 percent of the month's total.
The budget cuts we've seen on the state and national level are going to mean higher unemployment numbers - something that the peppy economic forecasters would like to ignore. It's difficult to imagine how we can claim an economic recovery when so many are still out of work, and so many are about to be.
cross-posted at MainSt/workingamerica.org