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July 07, 2003
Jobless Rate Jumps to 6.4%

The national unemployment rate shot from 6.1 percent in May to 6.4 percent in June - the highest level it has seen in more than nine years, according to the U.S. Labor Department.

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The department also announced that for the fifth straight month, the economy lost 30,000 jobs in June. Most of those jobs were in factories.

The 0.3 percent increase in the unemployment rate was the largest month-to-month rise since the Sept. 11, 2001 terror attacks. According to the Associated Press, that surprised analysts, since they had been expecting a smaller rise, to 6.2 percent.

While the job pool shrank in June, the labor pool grew. Optimism about an economic rebound led more than 600,000 people to resume their search for work, the AP reports.

Kathleen P. Utgoff, commissioner of the DOL's Bureau of Labor Statistics, issued this analysis of where the economy lost jobs: "Construction and some service-providing industries added jobs. These gains, however, were offset by the continuing erosion of employment in manufacturing, telecommunications, and air transportation, as well as losses in other industries. Thus far in 2003, payroll employment has decreased, on net, by 236,000."

Manufacturing employment was down by 56,000 in June, Utgoff said, noting: "Nearly all manufacturing industries have been shedding jobs for more than two years, and total factory employment has declined by 2.6 million since its most recent peak in July 2000. Over the month, manufacturing job losses were widespread, with notable declines in primary metals, fabricated metals, machinery, textile mills, and plastics. Manufacturing hours and overtime were unchanged."

The troubled airline and telecommunications industries also lost jobs. Since March 2001, they have lost 123,000 and 202,000 jobs, respectively. In June, employment in wholesale and retail trade continued to wane; in retail, this decline occurred despite a job gain in building material and garden supply stores.

Here is Utgoff's summary of employment in other sectors of the economy:

"Employment in construction edged up in June for the fourth month in a row. Since February, the number of jobs in the industry has increased by 101,000. Within construction, residential building activity has been buoyed by low interest rates. These low rates also have benefited the credit intermediation industry, which includes mortgage banking. Employment in the credit industry continued to trend up in June and has risen by 249,000 since July 2000.

"Job growth also continued in health care and social assistance; the industry has added 306,000 jobs over the year. In June, the largest employment gain was in ambulatory health care services (24,000). This industry includes offices of physicians, outpatient care centers, and home health care services. Employment in educational services was little changed over the month. Over the past year, the industry added 44,000 jobs, one quarter the number gained in the prior 12 months.

"In the leisure and hospitality sector, food services employment edged up in June and has increased by 139,000 over the past year. Employment in accommodations and in amusements, gambling, and recreation was little changed over the month.

"In professional and business services, the overall job total was essentially unchanged in June. Employment rose by 38,000 in the temporary help industry, following a gain of 44,000 in May. June’s increase in temporary help employment, however, was offset by employment declines in accounting services and in other professional and business service industries. Accounting and bookkeeping experienced a large seasonal buildup for the tax season followed by even larger layoffs. After seasonal adjustment, employment in this industry was down 36,000 from last November."


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