Tess Vigeland: What a week, huh? How ya'll doing? Well if you listened to last week's show. Then hopefully you remembered that markets go up and markets go down. It's what they do. And panic is not your friend. We'll get to Wall Street's mania in a few minutes. But first a far more important and lasting set of numbers. Friday's jobs report was better than expected. But there are lots of caveats.
Marketplace's Mitchell Hartman joins us with the details. Hi Mitchell.
Mitchell Hartman: You're welcome Tess.
Vigeland: Give us a rundown of the numbers.
Hartman: Well, given what's been happening with the economy, no one was expecting much job growth in July. We've had a summer of falling consumer spending and consumer confidence, and basically service and manufacturing businesses stalled out, not growing at all. So there's really no reason to add workers for companies.
And then we get 117,000 new jobs in July, and unemployment actually falling a bit -- though it is still above 9 percent. And some of that decline in the unemployment rate actually came from people giving up on the job hunt rather than finding work finally. And government has been cutting jobs. It's now nine straight months -- that's because of budget cuts at state and local government. And another 37,000 jobs were cut in July.
Vigeland: I was hoping you weren't going to have a "but" in there, but I just this is not such great news after all?
Hartman: You know, one jobs report can't really undo months of incredibly weak job creations. Since May, we've just added about 70,000 jobs a month on average. Economists say we need at least double that. That's just to keep up with all the people who enter the workforce just in the normal course of events. So what happened is the dust cleared this week from the horrible debt ceiling fight and we got a lousy economic back. Here's how Gary Burtless sees things. He's a labor economist at the Brookings Institution.
Gary Burtless: Resolving the debt ceiling impasse saved us from a great disaster. But the fact of the matter is, the country was ill before that and we remain ill afterward. The economy is still just growing very very tepidly and not fast enough to reduce the ranks of the unemployed.
Vigeland: Alright Mitchell, I'm going to toss it back to you and ask for any light at the end of this tunnel? Any bright spots here?
Hartman: Well, it looks like the tunnel at least has light in it.
Vigeland: That's a plus.
Hartman: Right. Private companies are continuing to hire. People are finding jobs in health care, retail, even manufacturing. The problem, Tess, is there are more clouds on the horizon. First off, August has started off terribly. Market panic and the debt crisis, so employers may already be cutting back on hiring and we won't know that for a while. Then, at the end of the year, Congress is gonna have to make some big decisions about whether to continue paying extended unemployment benefits to millions of people, also whether to extend the payroll tax cut. Ultimately, I don't think the job situation can really get better until the rest of the economy does. So it kinda all has to happen together.
Vigeland: Alright, Marketplace's Mitchell Hartman joining us from Portland, Ore. Thanks so much.
Hartman: You're welcome.