U.S. economy adds jobs

WASHINGTON — The U.S. economy generated jobs last month at the fastest pace since February, a sign it is resilient enough to pull out of a midyear slump and grow modestly as the rest of the world slows down.

WASHINGTON — The U.S. economy generated jobs last month at the fastest pace since February, a sign it is resilient enough to pull out of a midyear slump and grow modestly as the rest of the world slows down.

The 163,000 jobs employers added in July ended three months of weak hiring.

But the surprising gains weren’t enough to drive down the unemployment rate, which ticked up to 8.3 per cent last month from 8.2 per cent in June — the 42nd straight month the jobless rate has exceeded 8 per cent.

The United States remains stuck with the weakest economic recovery since World War II.

The latest job numbers, released Friday by the Labor Department, provided fodder both for President Barack Obama, who highlighted improved hiring in the private sector, and Republican challenger Mitt Romney, who pointed toward higher unemployment.

“It’s not especially weak, but it’s not especially strong,” said Scott Brown, chief economist at the investment firm Raymond James.

Investors focused on the positive. The Dow Jones industrials surged 217 points.

Three more monthly jobs reports will come out before Election Day, including the one on October employment on Friday, Nov. 2, four days before Americans vote.

No modern president has faced re-election when unemployment was so high. President Jimmy Carter was bounced from office in November 1980 when unemployment was 7.5 per cent.

In remarks at the White House, Obama said the private sector has added 4.5 million jobs in the past 29 months. But he acknowledged there still are too many people out of work.

“We’ve got more work to do on their behalf,” he said.

Former Massachusetts Gov. Romney focused on the increase in the unemployment rate, as did other Republicans. “Middle-class Americans deserve better, and I believe America can do better,” Romney said in a statement.

The economy is still struggling more than three years after the Great Recession officially ended in June 2009.

The collapse of the housing market and the financial crisis that followed froze credit, destroyed trillions of dollars in household wealth and brought home construction to a halt. Consumer spending, which accounts for 70 per cent of economic output, remains weak as American families pay down debts and save more.

From April through June this year, the economy expanded at a listless 1.5 per cent annual pace, a slowdown from the January-March pace of 2 per cent.

The job market got off to a strong start in 2012. Employers added an average 226,000 a month from January through March.

But the hiring spree was caused partly by a surprisingly warm winter that allowed construction companies and other firms to hire earlier in the year than usual, effectively stealing jobs from the spring. The payback showed up as weak hiring — an average 73,000 a month — from April through June.

Then came the 163,000 new jobs in July, beating the 100,000 economists had expected.

Now that the warm weather effects have worn off, economists expect job growth to settle into range of 100,000 to 150,000 a month.

Which would be consistent: The economy has added an average of 151,000 jobs a month this year. But that hasn’t been enough to bring unemployment down. At 8.3 per cent, unemployment was as high in July as it had been in January.

The unemployment rate can rise even when hiring picks up because the government derives the figures from two different surveys.

One is called the payroll survey. It asks mostly large companies and government agencies how many people they employed during the month. This survey produces the number of jobs gained or lost.

The other is the household survey. Government workers ask whether the adults in a household have a job and use the findings to produce the unemployment rate. Last month’s uptick in joblessness was practically a rounding error: The unemployment rate blipped up from 8.22 per cent in June to 8.25 in July.

Worries have intensified that the U.S. economy will fall off a “fiscal cliff” at the end of the year. That’s when more than $600 billion in tax increases and spending cuts will kick in unless Congress reaches a budget deal.

The draconian dose of austerity is meant to force Republicans and Democrats to compromise. If they can’t and taxes go up and spending gets slashed, the economy will plunge into recession, contracting at an annual rate of 1.3 per cent the first six months of 2013, according to the Congressional Budget Office.

The rest of the world is slowing. Much of Europe is in recession as policymakers struggle to deal with high government debts, weak banks and the threat that countries will abandon the euro currency and wreck the region’s financial system. Citing a “worsening crisis,” European Central Bank President Mario Draghi said Thursday the bank is preparing to unleash its financial might and buy government bonds to help drive down borrowing costs in debt-ridden countries like Spain and Italy.

The high-powered economies of China, India and Brazil are slowing sharply, partly because Europe’s troubles have hurt their exports.

In the United States, the Federal Reserve earlier this week passed up a chance to approve new measures to jolt economic growth but signalled it was ready to act if growth and hiring stayed week. That led many economists to predict the Fed would announce a third round of bond purchases designed to push long-term interest rates down and generate more borrowing and spending in the economy.

“If the previous three months of lacklustre job creation were not enough to spur the (Fed) into acting more aggressively to stimulate the economy, these numbers must surely kill off the possibility of imminent action,” said Chris Williamson, chief economist at Markit in London.

The job market still has a long way to go. The economy lost 8.8 million jobs from the time employment peaked in January 2008 until it hit bottom in February 2010. Since then, just 4 million, or 46 per cent, have been recovered. Never since World War II has the economy been so slow to recover all the jobs lost in a downturn.

A broader measure of weakness in the job market deteriorated in July: The proportion of Americans who were either unemployed, working part time because they couldn’t find full-time work or too discouraged to look for work rose to 15 per cent from 14.9 per cent in June.

Nearly 5.2 million Americans have been out of work for six months or more.

Eric Kosmack, 24, has applied for about 450 jobs since he graduated in January 2011 from Montclair State University in New Jersey. He is looking for a job in accounting to put his mathematics degree to work. He has had three temporary jobs since then, including one that ended Tuesday, but no luck in his search for a permanent one.

And many of the jobs he has seen described as “entry level” still ask for 1-3 years of experience, which he doesn’t have. “I understand that they want to find the perfect candidate, but it seems like a long process,” he said.

Those lucky enough to have jobs aren’t seeing their spending power grow. Average hourly wages increased by 2 cents to $23.52 an hour in July. Over the past year wages have increased 1.7 per cent — just matching the rate of inflation.

“The glass half full is that this report should ease fears that we’re slipping into recession,” said Michael Feroli, an economist JPMorgan Chase Bank. “The glass half empty is that the labour market generally still stinks when thinking about things that matter for people’s well-being, like wage growth.”

Government cutbacks continued to weigh heavily on the job market. The economy lost 9,000 government jobs last month and 660,000 over the past two years.

Private companies have picked up part of the slack. In fact, private payrolls are higher now than they were when Obama took office in January 2009.

In July, private sector job gains were broad-based. Manufacturing added 25,000 jobs, the most since March. Restaurants and bars added 29,000. Temporary help services added 14,100 jobs. Retailers hired 7,000 more workers. Education and health services gained 38,000.

Tania Dougherty, owner of The Little Wine Bus in New York, has two tour guides and wants to hire at least three more. That’s because more companies are booking her daylong winery tours for employee outings.

After the financial crisis hit in 2008, companies cut back on bonuses, raises, vacation days and other perks, Dougherty said. But employers are now realizing they need to spend more money on their workers in order to retain them, she said.

“They want to show them a good time,” said Dougherty. “People are working longer hours. It’s a way to reward employees. They deserve the day out, and companies are realizing that.”

Meanwhile, Sherry Sheppard, owner of the I Love Cupcakes store in Largo, Fla., would like to hire a new employee but is holding off until she’s sure the economy is getting better. She has three employees now. If more people lose jobs, they’ll be less likely to spend money on guilty pleasures like cupcakes, Sheppard said.

“Being that it’s an election year, it’s hard to tell how the economy is doing,” Sheppard says. “Maybe after the election we’ll get a better picture.”

———(equals)

AP Business Writer Joseph Pisani in New York contributed to this report.

Just Posted

A gofundme account has been set up for Lilac the husky, of Blackfalds. (Photo from gofundme)
Dog ends up in coma after a walk in Blackfalds

Dog finds a baggie that likely contained drugs

(Contributed)
Red Deer man reported missing

Red Deer RCMP seek public’s assistance

An attendee of the Maskwacis memorial held on May 31, 2021, for the 215 school children found in Kamloops, B.C. the week before, holds a teddy bear. <ins>The grandstand was filled with 215 bears to represent the lost children. They were offered to residential school survivors at the end of the memorial. </ins>(Photo illustration by Emily Jaycox/Ponoka News)
Ermineskin residential school survivor: ‘It just brings me back to the cries at night’

Discovery in Kamloops of remains of 215 children a painful time for survivors

Sweden’s Prime Minister Stefan Lofven before a confidence vote in the Swedish Parliament in Stockholm, Sweden, Monday June 21, 2021. Sweden’s Prime Minister Stefan Lofven faces a no-confidence vote in the Riksdag parliament, after the Left Party said this week that it had lost confidence in Lofven and his center-left minority government. (Anders Wiklund / TT via AP)
Swedish PM loses confidence vote, sparking uncertainty

Prime minister has one week to call new election or ask parliament speaker to find a new government

A large number of supporters were out Saturday at a rally intended to bring awareness about including Hinduism in the grade 2 portion of the K-6 draft curriculum. As it stands now, Hinduism won’t be taught until grade 6 in the proposed draft curriculum. (Photo by BYRON HACKETT/Advocate Staff)
Video: Rally to support adding Hinduism to draft curriculum draws crowd in Red Deer

The Hindu community in Red Deer came out in droves on Saturday… Continue reading

The border crossing into the United States is seen during the COVID-19 pandemic in Lacolle, Que. on February 12, 2021. THE CANADIAN PRESS/Paul Chiasson
Canada to unveil travel rules for fully vaccinated citizens, permanent residents

OTTAWA — Canada is set to detail what quarantine rules citizens and… Continue reading

Hockey legend Wayne Gretzky poses for a photo in Toronto on Monday, October 17, 2016. Two of Canada’s most prominent athletes are part of the ownership group of a new Las Vegas National Lacrosse League franchise. THE CANADIAN PRESS/Michelle Siu
Wayne Gretzky, Steve Nash join forces with Las Vegas lacrosse team

League’s 15th team will start play in the fall of 2022

Orlando City and Montreal Impact players take a knee before their MLS match, Sunday, Nov. 1, 2020, at Red Bull Arena in Harrison, NJ.  THE CANADIAN PRESS/AP-Eduardo Munoz Alvarez
CF Montreal finds two new home venues as Gold Cup comes to Fort Lauderdale

Exploria Stadium has been Toronto FC’s home field this year

Police and firefighters respond after a truck drove into a crowd of people injuring them during The Stonewall Pride Parade and Street Festival in Wilton Manors, Fla., on Saturday, June 19, 2021. WPLG-TV reports that the driver of the truck was taken into custody. (Chris Day/South Florida Sun-Sentinel via AP)
Officials say deadly Pride parade crash was not intentional

Driver and the victims were a part of the Fort Lauderdale Gay Men’s Chorus family

FILE - In this April 18, 2017, file photo, a conference worker passes a demo booth at Facebook’s annual F8 developer conference, in San Jose, Calif. Facebook is launching podcasts and live audio streams in the U.S. Monday, June 21, 2021, to keep users engaged on its platform and to compete with emerging rivals.(AP Photo/Noah Berger, File)
Facebook launches podcasts, live audio service

Handful of podcasts will first be available to people in the U.S.

Intricate cloth masks with Indigenous design made by Teresa Snow. Facebook/ Masks4Maskwacis
‘Masks 4 Maskwacis’ wins Northern Lights Volunteer Award

The group received recognition for their efforts to support their community during COVID-19.

Barbara Violo, pharmacist and owner of The Junction Chemist Pharmacy, draws up a dose behind vials of both Pfizer-BioNTech and Oxford-AstraZeneca COVID-19 vaccines on the counter, in Toronto, Friday, June 18, 2021. An independent vaccine tracker website founded by a University of Saskatchewan student says just over 20 per cent of eligible Canadians — those 12 years old and above — are now fully vaccinated. THE CANADIAN PRESS/Nathan Denette
At least 20% of eligible Canadians fully vaccinated, 75% with one dose: data

Earlier projections for reopening at this milestone didn’t include Delta variant

This undated file photo provided by Ernie Carswell & Partners shows the home featured in the opening and closing scenes of The Brady Bunch in Los Angeles. Do you know the occupation of Mike Brady, the father in this show about a blended family? (Anthony Barcelo/Ernie Carswell & Partners via AP, File)
QUIZ: A celebration of dad on Father’s Day

How much do you know about famous fathers?

Most Read