The prospect of a “lost decade” for the U.S. economy seems to be getting closer and closer to reality based on the June 2010 employment numbers released today by the U.S. Bureau of Labor Statistics. Overall employment was down 225,000 as census activity fell. While private employment crept forward, adding 83,000 jobs in June, this is well below what would be expected or needed for a robust recovery.
Fortunately, positive jobs numbers, small increases in home prices, and modest increased construction activity in housing suggest the economy has bottomed out. Unemployment rates also dipped to 9.5 percent from 9.7 percent in May.
But high unemployment rates, particularly for teenagers (25.7 percent in June), African Americans (15.4 percent), and Hispanics (12.4 percent) showed little change. The BLS also reports the long-term unemployment and “discouraged workers” rates have changed little.
Complicating matters, the so-called stimulus program is showing itself for the paper tiger it is. Despite filling pot holes, shifting home purchases up several months, and spending on marginally beneficial programs, construction unemployment hovers around 20 percent. In fact, construction jobs fell by 22,000 even as most other industries (including manufacturing) showed modest increases.
Rising deficits and the national debt, unfunded entitlements, and the prospect of less money for lending to meet newly imposed capital requirements on banks all create uncertainty in the private sector that makes investors skittish.
— Samuel R. Staley is Robert W. Galvin Fellow and director of Urban & Land Use Policy at the Reason Foundation.