The nation lost jobs for a sixth month in a row in June, a storm of pink slips drenching this year's July Fourth holiday for more than 60,000 Americans and leaving thousands more worried about the future.
Weighed down by energy prices and the housing crisis, employers laid off workers in stores, factories and forsaken building sites.
With more job cuts expected in coming months, there's growing concern that many people will pull back on their spending later this year when the bracing effect of the tax rebates fades, dealing a dangerous setback to the shaky economy. These worries are rekindling recession fears.
"The deteriorating jobs climate will dampen many a barbecue this weekend. It's hard to celebrate when you are out of a job," said Richard Yamarone, economist at Argus Research.
In June alone, employers got rid of 62,000 jobs, bringing total losses so far this year close to a staggering half-million — 438,000, according to the Labor Department's report released Thursday. The economy needs to generate more than 100,000 new jobs a month for employment to remain stable.
The jobless rate held steady at 5.5 percent after jumping in May by the most in two decades. Still, June's jobless rate was considerably higher than the 4.6 percent of a year ago. The unemployment rate is expected to climb through the rest of this year and top 6 percent early next year.
Just in the past few days, Chrysler LLC said it would close a plant and Starbucks Corp. said it would shut some 600 stores in the next year, meaning more lost jobs ahead. American Airlines recently said it may cut flight attendant jobs, the AP reports.
"It's probably going to be this downward glide [of job losses] – nothing really drastic but maybe 50,000 to 100,000 a month," says Brian Bethune, an economist at Global Insight in Lexington, Mass. "What we'd like to see is for the employment market to stabilize" later this year.
"Remarkably, job cuts have not spread as widely as we might expect in this weakening economy," John Challenger, a Chicago outplacement executive, says in a written analysis of employment conditions. "Job cuts in the retail, industrial goods, and consumer product manufacturing sectors have remained fairly level since the economy began its decline last August."
He adds that state governments could be putting themselves in a bind. By keeping employment high now, they may face even tougher choices on how to balance budgets next year. Many states are now running through reserves, in part because falling home prices are affecting property tax revenues, Christian Science Monitor reports.
The Labor Department report included several other important indicators:
- The nation's unemployment rate held steady at 5.5 percent.
- Average hourly earnings rose to $18.01, a 6-cent gain for the month.
- The average work week stayed at 33.7 hours. A decline in overtime, and a shift for many workers into part-time work, has been one way that the employers have adjusted in recent months without resorting to more layoffs.
- Some 5.4 million part-time workers would rather be working full time, up from 4.3 million a year ago.
- More than 18 percent of unemployed workers have been without jobs for at least half a year, another sign of stress in the job market.