“The president always tells us he inherited a bad situation,” Rep. Jeb Hensarling (Tex.) , chairman of the House Republican Conference, said at the news conference. “I concede the point, but he has made it worse, and after two and a half years it is time for him to take responsibility and answer the question, ‘Where are the jobs?’ ”
The steepest losses in June, as they have been throughout 2011, were in government jobs. With state and local governments slashing workers by the tens of thousands to balance their budgets and the federal government posting heavy job cuts as well, overall government employment fell by 39,000 positions in June. That followed 48,000 jobs cut in May.
But unlike earlier in the year, when private-sector job creation was strong enough to make up for the decline in government jobs, businesses appear to be hiring less than they were.
For example, transportation and warehousing employment, a good proxy for broad economic activity, rose by 3,600 jobs in June, compared with 11,500 in May. Financial-sector employers cut 15,000 jobs after adding 14,000 in May.
In normal times, the Federal Reserve might respond to the weakening jobs picture with interest rate cuts. However, the Fed’s main interest rate target is already near zero and it has already taken a slew of unconventional steps to prop up growth. As a result, the Fed is unlikely to take further action unless there are signs that the economy is falling into recession or that deflation — a period of falling prices — is reemerging as a risk.
Washington Post staff writers Phillip Rucker, Sandhya Somashekhar, Felicia Sonmez and Amy Gardner contributed to this report.
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