Biden admitted that the administration had under-estimated the severity of the recession when it predicted that unemployment would peak at 8%.
The number of people in the U.S. out of work, 14.7 million June, continues to grow relentlessly in spite of government attempts to downplay the data. The continuing loss of jobs across broad sectors of the economy make it increasing unlikely that vehicle sales will rebound during the balance of this year or even early next year.
Already stressed automakers and their suppliers will likely be forced to cut back more, which makes further job losses predictable, as the economy continues to contract. It’s a viscous cycle we need to break.
Non-farm employment continued to fall in June, as another 467,000 taxpaying jobs were shed by employers, and the unemployment rate rose to 9.5%, a 26-year high, according to the Bureau of Labor Statistics. Some economists say the number is really 16.5%, if you include discouraged people who have not been able to find work and have dropped out of the job market. Either way, America’s ability to create wealth and prosperity is severely restricted.
Since the Great Recession officially began in December 2007, employment has dropped by 7.2 million workers, and the unemployment rate has increased by 4.6%. Roughly one-third of the unemployed have now been jobless for longer than 27 weeks.
There is no doubt that the U.S. is in the deepest recession since World War II, and the worst financial crisis since the Great Depression, if you consider our capital and housing markets.
As people associated with auto manufacturing are all too well aware, job losses continue to mount at frightening rates. In June, once again, there were large decreases in manufacturing, construction, and professional and business services. Together, these three sectors have accounted for nearly three-quarters of the jobs lost since the recession began.
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In his weekly radio address on Saturday, President Barack Obama said “We are facing an array of challenges on a scale unseen in our time. We are waging two wars. We are battling a deep recession. And our economy – and our nation itself – are endangered by festering problems we have kicked down the road for far too long: spiraling health care costs; inadequate schools; and a dependence on foreign oil.”
On a Sunday morning chat show, Vice President Joseph Biden admitted that the administration had underestimated the severity of the recession when it predicted that unemployment would peak at 8% while pushing through an almost $800 billion dollar stimulus package, but deflected questions on the need for another or more effective stimulus package saying the one on place needed time to work.
This will be small comfort for the 136,000 people in manufacturing who lost their jobs in June, bringing job loss in this industry to 1.9 million since the start of the recession. Motor vehicle and parts employment declined by 27,000 over the month; since the start of the recession, the industry has lost 335,000 jobs, about one-third of its total.
Construction employment decreased by 79,000 in June. Job losses here have totaled 1.3 million during this recession.
Employment in professional and business services dropped by 118,000 in June. Job losses occurred throughout the industry, including temporary help services (-38,000), services to buildings and dwellings (-17,000), and architectural and engineering services (-14,000). Since the start of the recession, professional and business services has lost 1.5 million jobs.
So the question facing all of us is what to do now?
There is a $160 billion in recovery money that’s been allocated to this point – and politicians keep saying it is going to create jobs – but we keep losing jobs. Now it is true that the situation is inherited, but at some point this economy, as weak as it is and as badly as it was hurt by Bush administration and Republican policies, becomes the responsibility of the Obama Administration and both Houses of Congress. And it takes the creation of 150,000 jobs a month, just to hold the unemployment rate at 10%.