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U.S. unemployment rate dips
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CBC News- The U.S. economy created 117,000 jobs in July, the Labor Department reports, and the unemployment rate dipped slightly to 9.1 per cent, from 9.2. The report Friday beat economists' expectation for creation of 90,000 jobs.
The report came a day after world financial markets plunged, fearing that the U.S. was going into recession. Wall Street had its worst day in nearly three years, with the Dow Jones industrial average plummeting more than 500 points.
The government also revised the previous two months' totals to show hiring wasn't as weak as first estimated.
The economy added 53,000 in May, up from an earlier estimate of 25,000, and 46,000 in June, up from 18,000. June's total was still the weakest in nine months.
State and local governments cut another 39,000 workers, but private sector hiring in July was broad-based. Manufacturers added 24,000 jobs in July, as auto companies laid off fewer workers in July than usual. Retailers hired a net total of 26,000 employees. Employment in health care grew 31,000. Hotels and restaurants added 17,000.
The rate has topped nine per cent in every month except two since the recession officially ended in June 2009.
"Overall, not a bad report," Sal Guatieri, senior economist with BMO Capital Markets said in a commentary, "but not great either."
More convincing signs of recovery needed
Guatieri said it would help to allay fears that the U.S. would enter recession, "though markets will remain nervous until more convincing signs of recovery emerge."
Still, the economy needs twice as many net jobs per month to rapidly reduce unemployment.
TD Bank economist James Marple said the job creation in July was "just enough to stop it from deteriorating further. We are not convinced that a recession is inevitable, but an economy operating at stall speed is more susceptible to downside shocks."
The unemployment rate fell partly because some unemployed workers stopped looking for work. That means they are no longer counted as unemployed and that results in a drop in what's called the participation rate.
"The continued decline in the participation rate should not be overlooked," Marple said.
"At a minimum, it clouds the interpretation of the unemployment rate, which would be significantly higher if these workers were included. At worst, it represents a real loss of economic potential that will be difficult to recuperate, even after a recovery takes shape."
The report follows a string of gloomy data that shows the economy has weakened.
The economy expanded at a meagre 0.8 per cent annual rate in the first six months of this year, the slowest pace since the recession officially ended. Manufacturers are barely growing. Service companies are growing at the weakest pace in a year and a half.
The U.S. jobless figures came out 90 minutes after the release of Canada's employment report. Statistics Canada said the unemployment rate dipped to 7.2 per cent in July, as 7,100 jobs were created.
While Canada's overall job creation last month came in shy of the 15,000 to 20,000 forecast, economists saw some positive developments on the Canadian front — such as healthy private-sector and full-time job creation numbers.
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