(Source: McClatchy Washington Bureau)
WASHINGTON _ Another important sign of a firming economic recovery emerged Friday from government statistics showing a slowdown in the torrid pace of job losses, even as a larger-than-expected rise in the unemployment rate to 9.7 percent signaled a long road ahead before Americans feel a return to normalcy.
Employers shed 216,000 jobs in August, a significant slowdown from the revised 276,000 jobs lost in July. Following a key manufacturing index showing growth for the first time in 18 months and recent signs that the housing market is firming, Friday's job numbers from the Bureau of Labor Statistics are one more indication that the U.S. economy appears to have hit bottom and is beginning to rebound.
However, the still-rising unemployment rate _ up from 9.4 percent in July to the highest rate in more than 26 years _ will continue to dampen consumer confidence and business hiring.
"The job market is on the mend, but has a long, painful recovery ahead of it. Businesses are scaling back their layoffs, but they have yet to increase their hiring," said Mark Zandi, the chief economist for Moody's Economy.com. "It won't be until next year before job growth resumes, as the leading indicators _ including near-record-low hours worked and falling temporary-help jobs _ remain weak."
The significance of Friday's report is that it shows job losses continuing to improve steadily.
"That really is what is important," Christina Romer, the head of the White House Council of Economic Advisers, said on CNBC television. "It's still a terrible number, but it is certainly showing those numbers moderating."
Health care was the only bright spot in Friday's numbers. The sector added more than 28,000 jobs, while the construction and manufacturing sectors posted another month of big losses, 65,000 and 63,000 positions, respectively.
In service industries, both financial services and retail sales lost fewer jobs than they did in previous months, another positive sign.
The Department of Labor numbers also showed 16.8 percent of the work force underemployed or unemployed.
Since the recession began in December 2007, the number of unemployed has risen by 7.4 million and the unemployment rate has increased by 4.8 percentage points. Some 14.9 million Americans are unemployed; when rounded as a percentage, one in 10 working-age Americans is jobless.
Nearly 5 million Americans have been unemployed for six months or longer, putting renewed pressure on Congress and the Obama administration to extend unemployment benefits again.
