Unemployment Report Brings Effectiveness of Stimulus into Question

For the ninth consecutive month, the unemployment rate rose, suggesting that the beleaguered U.S. economy is far from bottoming out and the Obama administration’s $787 billion stimulus package may not be having its desired effect.   

The unemployment rate rose to 9.5 percent in the month of June from 9.4 percent in May, according to statistics released by the U.S. Labor Department.  That is less than the 9.6 percent unemployment rate economists had predicted.   

That slight rise, however, was blunted by the fact that a total of 467,000 jobs were shed in June - much higher than the 365,000 jobs expected to be lost in June.   

"The disappointing report highlights the severity of the downturn and suggests a bottom for employment is not near," Sophia Koropeckyj at Moody's Economy.com, told AFP. 

All told, the economy has shed an astounding 6.5 million jobs since the recession began in December 2007.  In just the first six months of 2009, 3.4 million jobs have been lost.   

The June losses were widespread, affecting nearly every sector of the economy.  The only two sectors that did not experience job loss were education and health care.   

Manufacturing jobs continued to disappear rapidly in June, with 136,000 lost.  A total of 1.9 million manufacturing jobs have been shed since the recession began in December 2007.    

"In June, there were large decreases in manufacturing, construction, and professional and business services," said Bureau of Labor Statistics Commissioner Keith Hall in a statement. "Together, these three sectors have accounted for nearly three-quarters of the jobs lost since the recession began.”

The continued rise in job losses may be a sign that the Obama administration’s $787 billion stimulus package may not be saving and creating the jobs that the administration promised it would.   

 “The stimulus has probably stabilized income, but it has not moved the economy forward,” John E. Silvia, chief economist at Wachovia Corporation, told The New York Times. “It’s a finger in the dike. But in terms of getting the economy going, there’s no evidence of that yet.”

Source CNNMoney.com:

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