New Unemployment Data Suggest Economy May Be Bottoming Out

The U.S. Bureau of Labor Statistics reported relatively good employment news for July 2009. Layoffs were less severe than expected and the unemployment rate holding steady since June, suggesting the economy may be bottoming out.

“Nonfarm payroll employment continued to decline in July (-247,000),
and the unemployment rate was little changed at 9.4 percent, the U.S.
Bureau of Labor Statistics reported today. The average monthly job
loss for May through July (-331,000) was about half the average
decline for November through April (-645,000). In July, job losses
continued in many of the major industry sectors.

“In July, the number of unemployed persons was 14.5 million. The
unemployment rate was 9.4 percent, little changed for the second
consecutive month.”

Forecasters had expected layoffs to be closer to 320,000 and the unemployment rate to continue inching up toward 10 percent.

Of course, we don’t know what August holds, but the layoff data is encouraging news since it shows a continuing moderation of economic decline. As the Bureau reports:

“Total nonfarm payroll employment declined by 247,000 in July. From May
to July, job losses averaged 331,000 per month, compared with losses
averaging 645,000 per month from November to April. Since December
2007, payroll employment has fallen by 6.7 million.”

Of course, all this is happening even though the stimulus package has barely trickled into the economy.

Samuel R. Staley, Ph.D. is a senior research fellow at Reason Foundation and managing director of the DeVoe L. Moore Center at Florida State University in Tallahassee where he teaches graduate and undergraduate courses in urban planning, regulation, and urban economics. Prior to joining Florida State, Staley was director of urban growth and land-use policy for Reason Foundation where he helped establish its urban policy program in 1997.