JONATHAN COHN AUGUST 6, 2010
This just in: The economy lost 131,000 jobs last month. Overall, the unemployment rate held steady at 9.5 percent. But Heidi Shierholz, an economist from the Economic Policy Institute, explains why you shouldn't take too much comfort in that:
Today’s employment report is a snapshot of a labor market stuck in neutral. One in six US workers is either unemployed or underemployed, and while the private sector is now adding jobs, it’s painfully slow (71,000 in July) -- not enough to bring the unemployment rate down. In fact, the only thing that is keeping the unemployment rate from rising right now is the fact that the labor force is declining, which is not good news. (The share of the working age population that is employed has dropped 0.4 percentage points in the last four months, while we’ve actually seen improvement in the unemployment rate over that period.) The economic case for more government action to create jobs is about as clear as they come.