Ball State economist Michael Hicks says July's employment numbers are another disappointing piece of news.
The U.S. Labor Department said today that employers created 163,000 jobs in July but the unemployment rate increased from 8.2 to 8.3 percent as about 12.8 million people are out of work.
“New job growth, which is probably overstated due to an aging seasonal adjustment formula, we're still dominated by summer jobs in travel and tourism sectors and by a large increase in business and professional services,” says Hicks, director of Ball State’s Center for Business and Economic Research (CBER). “The first of these are temporary, and the latter almost certainly represent an accelerating shift by businesses in the use of temporary workers.
“We will need more than two years of job growth that is three times higher than this to fully recover from the past recession. Unfortunately, taken as a trend and combined with data on manufacturing and retail sales declines, and slowing GDP growth points to a continued high risk that the U.S. is slipping into a recession. Worsening conditions in Europe and Asia points to a very difficult last two quarters of 2012 and 2013.”
This will not be the last unemployment rate increase of the year, Hicks warns.