Surprisingly strong jobs data signal turning point

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(Agencies)
Updated: 2009-08-08 11:11

In July, the slowdown in layoffs reflected, in part, fewer job cuts in manufacturing, construction, professional and business services and financial activities. Those sectors had been pounded by the collapse of the housing market and the financial crisis.

There also were fewer layoffs in the temporary-help industry, which analysts watch for clues about future hiring. Retailers, though, cut more jobs in July. Those losses were blunted by job gains in government, education and health services, and in leisure and hospitality.

In another encouraging sign, revised job losses for May and June turned out to be less than previously reported.

The deepest job cuts of the recession came in January, when a net total of 741,000 job disappeared - the most in any month since 1949. Since the recession began in December 2007, the economy has lost 6.7 million jobs.

Still, some Fed officials think the jobless rate could rise as high as 10.6 percent by next year. The post-World War II high was 10.8 percent at the end of 1982.

An elevated unemployment rate could become a political liability for Obama when congressional elections are held next year. Ronald Reagan's GOP lost 26 House seats in the midterm elections in 1982.

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