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Job Losses Dampen Hopes for Economic Recovery
Independent economists generally think that it is too early to judge the effectiveness of the stimulus plan, given that the spending package is only starting to ripple through the broader economy.
Speaking in the Rose Garden yesterday, President Obama predicted that recovery will take a long time. "As I've said from the moment that I walked into the door of this White House, it took years for us to get into this mess, and it will take us more than a few months to turn it around," Obama said.
The June job losses were broad based, with the steepest cuts among manufacturers, which shed 136,000 positions; the auto industry and its suppliers slashed 26,500 jobs. But white-collar jobs were shed in large numbers as well, with the professional and business services sector cutting 118,000 positions, information cutting 21,000 and financial activities losing 27,000.
Even the federal government shed jobs, 49,000 of them, as the Census Bureau eliminated temporary positions. Education and health-care sectors were the only major drivers of growth, creating 34,000 positions.
There were positive signs in the report, though less apparent than the overall numbers. The rise in the unemployment rate was the smallest in a year, noted Bernard Baumohl of the Economic Outlook Group. And manufacturing overtime hours were stable, which can be an early sign of improvement. In a separate report yesterday, the Commerce Department said factory orders rose 1.2 percent in May, which was better than expected.
"The picture that is emerging with increasing clarity is of an economy that has undergone a wrenching recession the last 18 months but is now gradually transitioning into recovery," Baumohl said.
Staff writers Perry Bacon Jr. and Michael D. Shear contributed to this report.