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US employers shed 131,000 jobs
July figures heighten fears that US economy will take years to fully recover.
Last Modified: 06 Aug 2010 18:56 GMT
Obama said it was a 'good sign' that jobs had been created in the private sector [AFP]

The US economy shed more jobs than expected last month, the labour department has said, heightening fears that the world's largest economy could take years to fully recover from its recession.

About 131,000 jobs were lost and the unemployment rate remained stuck at 9.5 per cent in July, officials said on Friday.

Private firms created only 71,000 jobs over the month, far below the 200,000 needed each month to reduce the unemployment rate.

Government jobs were lost at the local, state and federal level, including 143,000 Census Bureau workers who ended their temporary contracts.

Analysts said the figures were another sign that the country's economic recovery is stagnating and that the job market may take years to get back on its feet.

'Too slow'

"The current pace of employment is too slow to replace the more than eight million jobs lost in the recession - not in the next year or two, perhaps even not in the next five years," Bart van Ark, the chief economist of business research firm The Conference Board, said.

"It's unlikely that industries such as construction and manufacturing will ever return to pre-recession employment levels."

But Barack Obama, the president, still hailed the report as a "good sign," pointing to the distance the private sector has travelled since the depths of the recession.

"The fact is we've added private sector jobs every month this year, instead of losing them, as we did for the first seven months of last year. That's a good sign."

But he admitted "the road to recovery doesn't follow a straight line. Some sectors bounce back faster than others".

The president's opponents said the data was evidence that massive economic stimulus spending had not worked.

"President Obama's economic policies have failed to create sustainable job growth," Michael Steele, the Republican National Committee chairman, said.

While Obama sees an $862bn stimulus plan and overhauls of the US healthcare industry and financial regulations as necessary to rebuild the economy, Republicans
view these policies as unnecessary government interventions into private markets.

"We stand for an economic recovery that, when unleashed with lower taxes, limited regulations, reduced spending and smaller government, will bolster the confidence of America's job creators," Steele said.

Source:
Agencies
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