Jobless rate drops slightly as more Americans stop looking for work Despite spending $787 billion, the economy and unemployment lag

WASHINGTON, DC—The Bureau of Labor and Statistics released June’s unemployment numbers, recording a drop in the jobless rate from 9.7 to 9.5 percent. Good news right? Not so fast. While President Obama and Vice President Biden continue their “Summer of Recovery” fantasy tour, the jobless rate fell because more people have given up looking for work, without those to count into the U-3 index (652,000), the unemployment rate dropped.

Private businesses added 83,000 jobs in June, but the government dropped 225,000 census jobs, bringing the total to 7.9 million jobs lost since the Great Recession began in December of 2007. Though counterintuitive, the unemployment rate drop comes as the BLS reports a net 125,000 jobs were lost in June—again, thanks to those poor U-6 schlubs that have become so discouraged, they’ve stopped looking for work (the U-6 rate stands at 16.5 percent, unchanged from June of 2009).

The president though has a decidedly different take, call it suspension of disbelief, while touting his stimulus as saving the economy in Racine, Wisconsin telling a crowd suffering an unemployment rate of 14 percent, “…every economist who has looked at it has said that the recovery did its job…”

-- Killswitch Politick

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Quarterly growth revised downward by Commerce Department Economic growth was weaker in the last quarter than previous quarters

WASHINGTON, DC--The Commerce Department revised the first quarter's growth downward from 3 percent to 2.7percent. Economists state that quarterly growth should be at least 3.5 percent to keep up with job losses and keep the economy from faltering further. In order to outpace the recession, growth needs to be at least 5 percent on a regular per quarter basis, but in order to out grow the recession, quarterly growth should average between 7 and 9 percent (the same rate sustained for 15 months in the 1980's).

U.S. economist with Capital Economics, Paul Dales, said, "Overall, the U.S. economy may be performing much better than those in Europe, but this is still the weakest and longest economic recovery in U.S. postwar history." By contrast, the economy grew 5.6 percent in the last quarter and most quarters have averaged approximately 3.5 percent, which could be an early indicator the economy is entering a double-dip recession or a W-shaped recovery.

-- Killswitch Politick

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Jobless benefit claims rise (again) 12,000 new claims put May’s adjusted total up to 472,000

WASHINGTON, DC—Revised unemployment numbers have been released showing a net spike in initial projections of jobless claims for the month of May from 460,000 up to 472,000—undermining recovery projections of the US economy as consumer confidence slides downward.

Economists expect the trend to continue until first-time jobless claims fall below 425,000 per week. 4.57 million Americans continue to claim unemployment benefits but that figure does not include the 5.2 million Americans who are claiming extended unemployment benefits. The most recent data from May 29^th shows that 9.7 million Americans claimed unemployment benefits.

Only 41,000 private sector jobs were created in May (down from 218,000 in the month of April), while the federal government added 411,000 in the form of temporary census worker jobs. Economist Jennifer Lee with BMO Capital Markets said, “We've definitely seen the economic recovery hit a wall.”

-- Killswitch Politick

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