Economy Alarm: Dems Promise “Recovery Summer” As Payrolls Drop and Private Hiring Declines
Despite A Surge in Federal Spending, Joblessness Remains
Vice President Biden Assures “Recovery Summer” Will Create New Jobs
“Vice President Joe Biden Thursday helps kick off what the White House calls “Recovery Summer,” a six week long push to highlight what the administration says will be jobs created this summer and fall by a surge in federal stimulus spending across the country.” (Dan Lothian and Paul Steinhauser, “White House begins new Stimulus push,” CNN, 6/17/2010)
Credibility Crash: Employment and Income Falls, Private Hiring Below Expected
Employment fell for the first [time] this year in June as thousands of temporary census jobs ended and private hiring grew less than expected, dealing a blow to President Barack Obama who has identified job creation as a key priority.
Nonfarm payrolls dropped 125,000, the largest decline since October, as temporary census jobs fell 225,000, the Labor Department said on Friday.
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Private employment, considered a better measure of labor market health, rose 83,000 in June, less than market expectations for a 112,000 gain.
Public unhappiness with the economy, especially after a record $787 billion package of spending and tax cuts, is eroding Obama’s popularity. Obama, has tried to put the blame on policies of the previous administration.
In the goods-producing sector, payrolls fell 8,000 in June, pulled down by declines in construction as home building dropped sharply following the end of a government tax credit. Manufacturing employment rose 9,000 after a 32,000 gain in May.
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With unemployment stubbornly high, household spending has turned sluggish in recent months, threatening to create a vicious cycle that stock market investors and some analysts worry could tip the economy back into recession.
“We are in a difficult situation. I don’t think there is political will to have another stimulus program and even if we did I am not sure people feel it would be that effective,” said Stephen Bronars, a senior economist at Welch Consulting in Washington. (Lucia Mutikani, “Payrolls fall, private hiring below forecasts,” Reuters, 7/02/2010)
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