US unemployment rate remains unchanged at 9.5% in July

August 8, 2010

The United States unemployment rate remained unchanged at a high 9.5% as employers and companies remained nervous about hiring new workers and the public sector laid off 143,000 temporary  workers during July. State and local governments, facing major budget deficits, also laid off many people.

Overall, the 131,000 jobs lost during July far exceeded economist's predictions of 65,000 jobs lost. The private sector added just 71,000 jobs during July, also less than the 90,000 economists predicted. Around 200,000 gains each month are needed just to hold the unemployment rate steady against first time entrants into the job market. Including the Census workers, the government laid off 202,000 people at federal, state, and local levels.

Though the unemployment rate remained at 9.5%, many discouraged job-seekers have given up looking for a position. Those who have given up are not counted as unemployed. The workforce participation rate, which counts those people as not participating in the workforce, dropped to 64.6% from 64.7% in June. The underemployment rate, which counts part-time laborers looking for a full-time job and those discouraged workers, was flat at 16.5% from June.

The also revised their job report for June. The new version now states that 221,000 jobs were lost in June, worse than the previous estimate of 125,000. The previous estimate also said that 83,000 private sector jobs were created, however the new estimate says that just 31,000 private positions were filled.

Despite this, most economists were fairly confident that though there would be slower growth in the future, the country wouldn't slip into another recession.

"Slower growth looks certain, but it's not a double dip," said economist Mark Vitner. Economists Jim O'Sullivan and Dean Maki say that jobs gains will pick up to 170,000 a month by the fourth quarter. Vitner says that jobs will gain at 87,000 per month for the rest of 2010.

The manufacturing industry has added 183,000 jobs this year including 36,000 in July. Some American companies are shifting overseas manufacturing jobs back to the US, primarily citing rising costs of doing business in and decreased wages in the US, among other considerations such as long supply lines and difficulty protecting intellectual property rights in. has relocated production of their new energy efficient water heaters to the US, while has brought 2,000 jobs to the US from suppliers, including those from overseas.