Private-sector growth remains sluggish, jobless rate holds

Private-sector job growth remained sluggish last month, increasing worries of a painfully slow economic recovery.

The nation added only 71,000 private sector jobs in July, fewer than the 83,000 added in June, according to Friday’s monthly report from the Labor Department.

ADVERTISEMENT
Overall, the economy lost 131,000 jobs as the government continued to shed temporary workers hired to conduct the 2010 census. The unemployment rate held steady at 9.5 percent, partly because many workers have given up their search for jobs. 

Labor also revised its figures for June and said Friday the economy lost a total of 221,000 jobs last month, instead of the 125,000 initially reported. 

The sluggish growth is coming at a difficult time for Democrats, who enter an election season in which they are in danger of losing control of the House and possibly the Senate.

Republicans pounced on the July report as further evidence that Democratic economic policies, including the $787 billion stimulus package, have failed. 

House GOP Leader John Boehner (R-Ohio) noted in a Friday statement that the administration had said unemployment would stay below 8 percent because of the stimulus. He also highlighted the resignation of one of President Obama’s chief economic advisers, Christina Romer, chairwoman of the Council of Economic Advisers.

“After another disappointing jobs report and the resignation of one of the chief architects of the trillion-dollar ‘stimulus,’ it’s time for President Obama to listen to the American people and face up to the fact that his ‘stimulus’ policies aren’t working,” Boehner said in the statement.

Romer will leave her post to return to her teaching position at the University of California-Berkeley, the White House announced Thursday.

Obama on Friday said the administration knew it would be a slow climb to turn around the economy. He underlined two points in the report: The private sector has added jobs for seven straight months, and the manufacturing sector is strengthening.

Obama spoke after a tour of Gelberg Signs, a small business in Washington, D.C., that the White House is touting as hiring new workers thanks to loans from the Small Business Administration.

Democrats at both ends of Pennsylvania Avenue are pressing the need to help small businesses in the fall and have cast Republicans as obstructionists for preventing a final vote on a Senate small business bill.

Speaker Nancy Pelosi (D-Calif.) in a Friday statement said the job report shows private employers are taking the lead in the economic recovery — she accused the GOP of impeding progress at every step. She cast Senate Republicans as siding with special interests against teachers and firefighters.

The House is returning to Washington next week to approve a $26 billion state aid package that includes $10 billion to prevent teacher layoffs. The Senate approved the legislation this week with two Republican votes.

Friday's report showed that state and local governments facing budgetary shortfalls are continuing to shed employees, a point Obama highlighted in his comments.

Rep. Carolyn Maloney (D-N.Y.), chairwoman of the Joint Economic Committee, acknowledged the economy is recovering slowly.

“You have to put this in perspective. The last month when Bush was in office, the economy lost 700,000 jobs,” she said in an interview.

Maloney said she is confident voters this fall will recognize that Democrats have focused on building a strengthened economy, including through the massive reform of the financial sector approved earlier this summer.

While the July jobs report released by the Department of Labor is about what was expected, it will add to concerns that the economy is failing to rebound strongly from the recession.

The economy has added a total of 630,000 jobs this year, fewer than what it was losing each month when job losses reached their peak in early 2009.

However, robust private-sector job growth evident in March and April has largely disappeared, reflecting private-sector uncertainty over the economy's direction.

The Commerce Department last week announced gross domestic product grew by only 2.4 percent in the second quarter.