South By North Strategies, Ltd.

CHAPEL HILL (July 2, 2010) – The national employment report for June offers little evidence of a sustained economic recovery. Last month, employers eliminated 125,000 more payroll positions than they added. An expected fall in temporary census employment drove that decline; after accounting for it, the economy gained 100,000 positions, a level insufficient to either keep pace with workforce growth or re-absorb jobless individuals.

“There is little in the June employment report to celebrate,” said John Quinterno, a principal with South by North Strategies, Ltd., a research firm specializing in economic and social policy. “Payroll employment fell sharply due to the ending of temporary census positions. When census jobs are excluded, the nation netted just 100,000 positions, of which 83,000 were in the private sector.”

In June, the nation’s employers shed 125,000 more payroll positions than they added. Losses occurred primarily in the public sector due to the elimination of 225,000 temporary census jobs. When census reductions are excluded, the economy gained 83,000 private-sector positions and 17,000 public-sector ones. The largest private-sector gains occurred in professional and business services (+46,000), primarily in the temporary help services sub-industry (+20,500), followed by leisure and hospitality services (+37,000). Construction payrolls fell by 22,000 positions due primarily to declines in nonresidential construction. All other major industry groups recorded little or no change.

“The June employment report is an uninspiring one that highlights just how dependent the economy is upon governmental supports,” noted Quinterno. “The private-sector proved unable to offset the drop in temporary census employment. In fact, during the first half of 2010, the private sector added an average of just 98,800 jobs each month.”

Weak job prospects also are reflected in the June household survey. Last month, 14.6 million Americans – 9.5 percent of the labor force –  were jobless and actively seeking work. Proportionally more adult male workers were unemployed than female ones (9.9 percent vs. 7.8 percent). Similarly, unemployment rates were higher among Black (15.4 percent) and Hispanic workers (12.4 percent) than among White ones (8.6 percent). The unemployment rate among teenagers was 25.7 percent.

Furthermore, newly available data show that 8 percent of all veterans were unemployed in June; the rate among veterans who had served since September 2001 was 11.5 percent.

“In developments inconsistent with a recovery, 652,000 individuals left the labor force in June, and the share of the adult population engaged in economically productive activities fell,” added Quinterno. “Compared to a year ago, the labor force is smaller, fewer people are employed, and the share of the labor force that is unemployed is unchanged.”

Job remained hard to find in June. Last month, 45.5 percent of unemployed workers had been jobless for at least six months with the average spell of unemployment lasting for 35.2 weeks. Many other individuals stopped looking, and counting those individuals and those working part-time on an involuntary basis brings the underemployment rate to 16.5 percent.

“The reduction in temporary census hiring in June exposed just how weak the labor market really is,” observed Quinterno. “The economy remains dependent on public supports and appears unable to stand on its own.”