The June unemployment report was released this week and it raised eyebrows. The unemployment rate increased to 9.5%; that part was expected. The number of jobs lost was 467,000, compared to 322,000 for May. This was much higher than economists had expected casting doubt on an early end to this recession. The Dow Jones Industrial Average fell 223 points in response to this.
Deeper in the report is some more disquieting news. The average workweek fell to 33 hours, the lowest on record. This, of course, means that many workers continue to have their hours trimmed. But they still have jobs and so don't count as part of the 9.5% unemployment rate.
Although this is a setback, the recession still looks like it will technically end this year. But with consumers so battered by losses in wealth due to lower housing and stock market prices, it will be hard for the consumer to lead the charge to a strong economic expansion next year. Additionally, tight credit will make it hard for consumers to finance purchases of big ticket items and for businesses to finance capital goods to expand their businesses.
I apologize for the delay between postings. I didn't properly factor in that I teach 2 accelerated economics courses this summer. Hopefully I am good to go now!
