Unemployment Drops to Pre-9/11 Levels

The U.S. unemployment rate has dropped to its lowest level since before the 9/11 attacks. Interestingly, Reuters portrays this as a bad thing.

Job growth tepid, jobless rate drops

U.S. employers added 146,000 jobs in June, below Wall Street forecasts, but the unemployment rate fell to its lowest point since September 2001 as few people joined the labor force, a government report showed on Friday. The Labor Department revised up job growth in April and May to 292,000 and 104,000, respectively – boosting the two-month count by 44,000 payroll jobs.

June’s tepid employment growth came in below analyst expectations for 188,500 new jobs in the month. But the decline in the unemployment rate to 5.0 percent was a nice surprise, since Wall Street had expected it to hold at 5.1 percent. The drop was mostly due to a paltry 1,000 increase in the work force, which includes those looking for work as well as those who have jobs.

Factory payrolls shrank for the fourth straight month as auto assembly and parts plants cut back on production. A glut of inventories has prompted many automakers to slow production lines until demand can catch up. Some 96,000 manufacturing jobs have been lost since August 2004. While 18,000 workers were hired in the construction industry last month, most of June’s employment growth came in the service sector. Professional and business services jobs rose 56,000, education and health services were up 38,000 and leisure and hospitality payrolls grew 19,000.

In a sign of underlying weakness, the length of the average workweek was 33.7 hours, unchanged from May’s downwardly revised length. The factory workweek was also unchanged at 40.4 hours, while overtime held at 4.4 hours.

Granted, the good news is diminished in comparison with even better forecasts. But a 5.0 unemployment rate is historically quite terrific. Further, growth in a solid economy is almost always “tepid;” it’s much easier to grow during recovery from hard times.

FILED UNDER: General
James Joyner
About James Joyner
James Joyner is Professor and Department Head of Security Studies at Marine Corps University's Command and Staff College and a nonresident senior fellow at the Scowcroft Center for Strategy and Security at the Atlantic Council. He's a former Army officer and Desert Storm vet. Views expressed here are his own. Follow James on Twitter @DrJJoyner.

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  2. Hal says:

    Well, except when the reason for the low unemployment rate is that people have stopped looking. I mean, really James. This is rather silly logic on your part, don’t you think? We are, after all, in the lowest point of private sector employment in history. Bush has actually lost jobs during his term.

    And here you are saying that it’s a great thing that our measurement is telling us all is roses.

    Nice misdirection. Doubt it will actually – you know – get someone a real job.

  3. John Thacker says:

    We are, after all, in the lowest point of private sector employment in history. Bush has actually lost jobs during his term.

    This, umm, ceased being true quite a few months ago. Feel free to carry on being wrong, though.

  4. Pajamahidin says:

    Unemployment Hits Four Year Low

    Unemployment hits major milestone, but not everyone’s celebrating.

  5. McGehee says:

    Nice misdirection. Doubt it will actually – you know – get someone a real job.

    Don’t blame the economy, Hal. It’s you.

  6. simon says:

    Hal, I have decided that its not Bush but you that is at fault about the number of people employed in America. When will you accept responsibility and begin hiring?

    Seriously, grow up and quit blaming Bush for something he has little control over … we live in a market economy

  7. Econbrowser says:

    Are the new employment figures really that bad?

    The unemployment rate has reached its lowest level of the last five years, and yet some
    economists still wring their hands in despair over the anemic job situation. I’m having some
    trouble following their reasoning on this one.